Suppose Inflation Is a Threat Because the Current Aggregate Demand

question 48

Multiple Choice

Suppose inflation is a threat because the current aggregate demand curve will increase by $600 billion at any price level. If the marginal propensity to consume is 0.75, federal policymakers can follow Keynesian economics and restrain inflation by:

• A) decreasing tax revenues by $600 billion.
• B) decreasing transfer payments by $200 billion.
• C) increasing tax revenues by $200 billion.
• D) increasing government purchases by $150 billion.

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Definitions:

Duty Of Loyalty

A fiduciary responsibility that requires individuals to act in the best interest of another party, such as a corporation or its shareholders.

Duty Of Care

An obligation to take reasonable care to avoid causing harm to another person.

Minority Shareholders

Individuals or entities that own less than 50% of a company's shares, often with limited control over corporate decisions.

Cumulative Voting

A method of voting in corporate elections that allows shareholders to concentrate all their votes on one candidate as opposed to distributing them among multiple candidates.