Contractionary Fiscal Policy Shifts the Aggregate Demand Curve to the _____

question 21

Multiple Choice

Contractionary fiscal policy shifts the aggregate demand curve to the _____ and is used to close a(n) _____ gap.

• A) right; inflationary
• B) right; recessionary
• C) left; inflationary
• D) left; recessionary

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Definitions:

Annuity

An annuity is a financial offering that ensures a regular payout to an individual, chiefly employed as a means of financial support for retired persons.

Compounded Quarterly

Interest calculated and added to the principal every quarter (three months), which then accrues additional interest in subsequent quarters.

Economic Advantage

The benefit gained by making a decision that results in the optimal utilization of resources, leading to a better outcome compared to other alternative decisions.

Residential Building Lot

A parcel of land designated for the construction of a single-family home or multiple residential units.