If Policymakers Are Concerned That the Economy Is in Danger

question 255

Multiple Choice

If policymakers are concerned that the economy is in danger of rising inflation because aggregate demand is increasing faster than aggregate supply, the appropriate fiscal policy response is to

• A)increase taxes.
• B)increase government spending.
• C)use expansionary fiscal policy.
• D)increase interest rates.
• E)increase transfers to other levels of government.

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Definitions:

Muscle Fiber

A single muscle cell, known for its elongated shape, that contracts to produce movement in the body.

Thickening

The process or result of becoming thicker, often referring to the increase in density or concentration of a substance.

Dorsiflexes

Refers to the action of moving the foot upwards towards the shin.

Arch

A curved structure designed to span a space or to support weight, often found in bridges and buildings.