If the Economy Exhibited an Inflationary Gap, the Government Should

question 30

Multiple Choice

If the economy exhibited an inflationary gap, the government should follow a(n) _____ policy, which would shift the AD curve to the _____.

• A)expansionary; right
• B)contractionary; right
• C)expansionary; left
• D)contractionary; left

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Definitions:

Future Payments

Obligations that a company is required to pay in the future, often as part of financing arrangements or purchase agreements.

Financial Affairs

Financial affairs encompass all aspects of finance including investments, assets, liabilities, income, and expenses related to an individual, business, or organization.

Specific Liability

A liability that is clearly identified and quantifiable, often related to particular activities or obligations.

Secured

Refers to a loan or obligation that is backed by collateral, reducing the risk associated with lending.