If a Contraction in Aggregate Demand Causes a Recession, the Great

question 11

Multiple Choice

If a contraction in aggregate demand causes a recession, the Great Moderation consensus on macroeconomics suggests that:

• A) fiscal discipline with a balanced budget eventually stimulates aggregate demand.
• B) fiscal policy should take the leading role in economic stabilization.
• C) the use of discretionary fiscal policy is counterproductive except in special circumstances.
• D) monetary discipline with a reduction in the money supply eventually stimulates aggregate demand.

Apply logical reasoning to analyze the validity and relationship between propositions.

Distinguish between different types of logical relationships, including subcontraries and contrapositives.

Formulate contrapositives of given propositions accurately.

Analyze the implications of logical relationships on the interpretation of propositions.

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Definitions:

Technology

Business application of knowledge based on scientific discoveries, inventions, and innovations.

U.S. Productivity

measures the efficiency of production in the United States, typically gauged by the output of goods and services per unit of labor input.

Gross Domestic Product

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Nation's Total Productivity

A measure of the efficiency of production within a country, accounting for the output of goods and services relative to input resources.