What Would Be Appropriate Government Action to Close an Inflationary

question 47

Multiple Choice

What would be appropriate government action to close an inflationary gap?

• A)Use policy to decrease aggregate supply.
• B)Use policy to decrease potential GDP.
• C)Use counter-cyclical fiscal policy to decrease aggregate demand.
• D)Use counter-cyclical fiscal policy to increase aggregate demand.

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Definitions:

Bipolar Disorder

A mental illness that causes extreme mood swings, including emotional highs (mania or hypomania) and lows (depression).

Cyclothymic Disorder

A chronic mood disorder characterized by alternating periods of mild depression and hypomania.

Chronic

Referring to a health condition or disease that is persistent or long-lasting in its effects, often for more than three months.

More Cyclic

Involving or characterized by cycles; often refers to conditions or processes that recur in cycles.