The Long-Run Aggregate Supply Curve Would Shift Right If the Government

question 14

Multiple Choice

The long-run aggregate supply curve would shift right if the government were to

• A)reduce the minimum-wage.
• B)make unemployment benefits more generous.
• C)raise taxes on investment spending.
• D)All of the above are correct.

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Definitions:

Multiplier

In economics, the factor by which gains in total output are greater than the change in spending that caused it, especially in the context of fiscal policy.

MPC

Marginal Propensity to Consume, indicating the increase in personal consumer spending (consumption) that occurs with an increase in disposable income.

Internally Held

Pertains to public debt that is owed to lenders within a country rather than external lenders.

Public Debt

The total amount of money that a country's government has borrowed by various means, including foreign governments and international organizations.