A Specific Reduction in Government Spending Will Dampen Demand-Pull Inflation

question 17

Multiple Choice

A specific reduction in government spending will dampen demand-pull inflation by a greater amount, the:

• A)smaller is the economy's MPC.
• B)flatter is the economy's aggregate supply curve.
• C)smaller is the economy's MPS.
• D)less the economy's built-in stability.

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Definitions:

Transferred

Refers to the act of moving ownership, possession, or rights of an asset from one party to another.

Negotiated

The process of trying to reach an agreement through discussion and compromise on terms of a contract, price, or other business arrangements.

Holder

In the context of financial instruments, a person in possession of a bill of exchange, check, or note that is payable to him or to bearer.

Transferee

A person or entity that receives property, rights, or a legal interest from another (the transferor) through a legal transfer process.