It Is Difficult for Policy Makers to Adopt an Expansionary

question 68

Multiple Choice

It is difficult for policy makers to adopt an expansionary policy as a response to a recession caused by a negative supply shock because an:

• A)expansionary policy leads to an increase in aggregate demand, which causes aggregate output to increase, causing inflation to rise.
• B)expansionary policy results in a shift of the aggregate demand curve to the left, as a result of which real output decreases.
• C)expansionary policy leads to an increase in aggregate demand, as a result of which the price level decreases.
• D)expansionary policy results in a shift of the long-run aggregate supply curve to the left, as a result of which the price level decreases.
• E)expansionary policy results in a shift of the long-run aggregate supply curve to the right, as a result of which the price level decreases.

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Definitions:

Ethical Relativism

The belief that morality is context-dependent and subjective, varying from one culture or individual to another.

Situational Ethics

An ethical theory that proposes the best ethical action is that which serves the particular circumstances, as opposed to following universal predetermined rules.

Central Authority

The main governing body or administrative organization that has the overarching control or oversight within a certain area or field.

Utilitarianism

An ethical theory that posits the greatest happiness of the greatest number should be the guiding principle of conduct.