In the Long Run, Fiscal Policy Primarily Affects

question 431

Multiple Choice

In the long run, fiscal policy primarily affects

• A) aggregate demand. In the short run, it affects primarily aggregate supply.
• B) aggregate supply. In the short run, it affects primarily saving, investment, and growth.
• C) saving, investment, and growth. In the short run, it affects primarily aggregate demand.
• D) saving, investment, and growth. In the short run, it affects primarily aggregate supply.

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Definitions:

Political Setbacks

Events or developments that hinder or reverse the progress of a political agenda, campaign, or the career of political figures.

New Deal

An array of measures such as programs, public construction efforts, fiscal changes, and rules implemented in the United States during the 1930s by President Franklin D. Roosevelt to address the Great Depression.

National Recovery Administration

A New Deal agency established in 1933 to combat the Great Depression by setting business codes and labor standards.

Great Depression

A severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States.