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:

Gross Profit Percentage

A financial metric that represents the proportion of money left over from revenues after accounting for the cost of goods sold, expressed as a percentage.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company.

Return on Equity Ratio

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how well a company uses investments to generate earnings growth.

Quality of Income Ratio

A financial metric that evaluates the ability of a company to translate its earnings into cash, reflecting the quality and sustainability of its earnings.