Suppose Aggregate Demand Is Too High to Bring About the Natural

question 33

Multiple Choice

Suppose aggregate demand is too high to bring about the Natural Real GDP level.A Keynesian policy prescription would call for a(n) _____________________ to close this inflationary gap.

• A) increase in government spending
• B) decrease in government spending
• C) increase in taxes
• D) decrease in taxes
• E) b or c

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Definitions:

Semicircular Canals

The passages in the vertebrate inner ear containing structures that control the sense of equilibrium (balance).

Endolymph

The fluid of the membranous labyrinth and cochlear duct of the ear.

Sensory Receptors

Specialized cells or proteins in organisms that detect and respond to external stimuli, transmitting sensory information to the nervous system.

Efferent Neurons

Neurons that transmit action potentials from the brain or spinal cord to muscles or glands. Compare with afferent neurons.