An Increase in Government Transfers Is an Example of the _____

question 173

Multiple Choice

An increase in government transfers is an example of the _____ fiscal policy because it shifts the aggregate demand curve to the _____ aggregate output.

• A) expansionary;left,increasing
• B) contractionary;left,decreasing
• C) expansionary;right,increasing
• D) contractionary;right,decreasing

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Definitions:

Profit Maximization

A method used by firms to determine the best output and price levels in order to achieve the highest profit.

Marginal Revenue

The additional revenue that a company receives from selling one more unit of a good or service.

Output Effect

The impact on total production and revenue when a firm alters the quantity of output produced, holding other factors constant.

Monopolist's Profit

The excess earnings a monopolist achieves due to the lack of competition, allowing for pricing above marginal cost.