When Fiscal Policy Makers Wish to Reduce Aggregate Demand, They

question 39

Multiple Choice

When fiscal policy makers wish to reduce aggregate demand, they could enact:

• A) contractionary fiscal policy.
• B) expansionary fiscal policy.
• C) contractionary monetary policy.
• D) expansionary monetary policy.

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Definitions:

Marginal Cost

The extra expense involved in creating an additional unit of a product or service.

Variable Costs

Costs that vary directly with the level of production or the volume of output.

Lease

A contract by which one party conveys land, property, services, or goods to another for a specified period, usually in exchange for periodic payments.

Bouquets

A collection or arrangement of flowers.