If the Economy Is Experiencing an Inflationary Gap and the Government

question 74

Multiple Choice

If the economy is experiencing an inflationary gap and the government wants to speed up the adjustment to full employment,the government should

• A)increase aggregate supply by cutting spending.
• B)reduce aggregate supply by cutting spending or raising taxes.
• C)reduce aggregate demand by cutting taxes or raising spending.
• D)reduce aggregate demand by cutting spending or raising taxes.

---

Definitions:

Civil Disobedience

The active, nonviolent refusal to obey a law that is deemed unjust.

Thoreau's Criteria

Standards or principles established by the American transcendentalist Henry David Thoreau, often related to civil disobedience and living simply.

Rule of Law

The principle that all people and institutions are subject to and accountable to law that is fairly applied and enforced.

Government Authority

The legal and formal right given to officials or bodies to make decisions, enforce laws, and administer public resources.