Which Policy Alternative Would Be an Appropriate Response to an Increase

question 91

Multiple Choice

Which policy alternative would be an appropriate response to an increase in investment demand by a government that wants to stabilize output?

• A) increasing taxes
• B) increasing the money supply
• C) increasing government expenditures
• D) increasing the government deficit

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Definitions:

Compliance

The act of adhering to rules, standards, or laws.

Punishment

The imposition of a penalty as a consequence of an undesirable behavior, aimed at reducing or eliminating that behavior.

Changing

The act or process of making or becoming different, often used in the context of personal, organizational, or social transformation.

Unfreezing

The initial stage in the change process where existing patterns or behaviors are challenged in preparation for change.