If Consumer and Business Sentiment Were to Increase Dramatically, Causing

question 41

Multiple Choice

If consumer and business sentiment were to increase dramatically, causing an expansionary gap:

• A)Monetary policymakers could stabilize the economy by shifting their monetary policy reaction curve to the right
• B)Fiscal policymakers could stabilize aggregate demand by cutting income and business taxes
• C)Monetary policymakers would likely shift the monetary policy reaction curve to the left to shift the dynamic aggregate demand left
• D)Fiscal policymakers could stabilize aggregate demand by increasing government purchases

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Bill of Exchange

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