Suppose Aggregate Demand Fell

question 119

Multiple Choice

Suppose aggregate demand fell. In order to stabilize the economy, what might the government do?

• A) increase the interest rate
• B) decrease the money supply
• C) increase government spending
• D) decrease the government expenditures

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Definitions:

Human Behavior

The range of actions and mannerisms exhibited by humans in conjunction with their environment, influenced by culture, attitudes, emotions, and genetics.

Behavioral Economics

A field that combines insights from psychology and economics to investigate how individuals actually make decisions, challenging the assumption of perfectly rational agents.

Gum

A soft, cohesive substance designed for chewing, made from the sap of certain trees or synthesized materials.

Candy

A sweet tasting confection made from sugar and often combined with fruits, chocolate, or nuts.