If the Economy Has an Inflationary GDP Gap,one Possible Solution

question 29

True/False

If the economy has an inflationary GDP gap,one possible solution is to increase taxes.
The fiscal policies available to the federal government for decreasing aggregate demand are to decrease government spending,increase taxes,or decrease transfer payments.

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Definitions:

Net Seller

An entity or individual that sells more of a security, commodity, or currency than they buy over a specified period.

Endowment

Refers to the total resources available to an individual or institution, including talents, wealth, and assets.

Normal Goods

Goods for which demand increases when consumer income rises, and decreases when consumer income falls, showing a direct relationship between income and demand.

Full Income

The total earnings, including all sources of income and gains, not just wages from employment.