A Government Might Want to Increase Aggregate Demand To

question 70

Multiple Choice

A government might want to increase aggregate demand to:

• A) close an inflationary gap.
• B) close a recessionary gap.
• C) reduce prices.
• D) reduce employment.

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Definitions:

Money Supply

The total amount of monetary assets available in an economy at a specific time.

Credit Cards

Financial instruments issued by banks allowing cardholders to borrow funds with which to pay for goods and services with the promise to repay the bank within a certain timeframe.

Smoot-Hawley

Refers to the Smoot-Hawley Tariff Act of 1930, which raised U.S. tariffs on over 20,000 imported goods.

Imports

Products or resources that are bought from foreign countries to meet domestic demand or consumption.