Which Policy Would Keynes's Followers Support When an Increase in Business

question 15

Multiple Choice

Which policy would Keynes's followers support when an increase in business optimism shifts the aggregate demand curve to the right away from long-run equilibrium?

• A) decreasing taxes
• B) decreasing the interest rate
• C) increasing the money supply
• D) increasing taxes

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Definitions:

Public Policy

Involves strategies and actions taken by the government to address issues within society, aiming to improve the public welfare.

Interest Groups

Organizations formed by individuals sharing a common interest, seeking to influence public policy and opinion.

Concentrated Interest Groups

Organizations that represent a specific sector or group of individuals with intense interests in particular policy areas, exerting significant influence on political processes.

Government Income Transfers

Payments made by the government to individuals without the requirement of an exchange of goods or services, such as welfare benefits or social security.