Which of the Following May Be an Appropriate Policy If

question 4

Multiple Choice

Which of the following may be an appropriate policy if real equilibrium GDP falls below the long-run aggregate supply curve?

• A) An increase in government purchases.
• B) Contractionary fiscal policy to increase the budget surplus.
• C) An increase in individual income taxes to balance the budget.
• D) An increase in business income taxes to increase tax fairness.

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Definitions:

Total Net Assets

Total net assets represent the total value of an organization's assets minus its total liabilities, indicating the net worth of an organization.

Total Capital

The sum of a company's equity, debt, and any other long-term financing.

Admission by Investment

The process of becoming a partner or member in a company or partnership through a financial investment.

Capital Balance

The amount of money in a company's equity account, not including profits or losses.