If the Economy Is Falling Below Potential Real GDP,which of the Following

question 151

Multiple Choice

If the economy is falling below potential real GDP,which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? An increase in

• A)the money supply and a decrease in interest rates.
• B)government purchases.
• C)oil prices.
• D)taxes.

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Definitions:

Accounts Receivable

Debts incurred by customers to a company for delivered goods or services that remain unpaid.

Cash

Money in the form of coins and banknotes; the most liquid form of assets a company has.

Journalizing

The process of recording transactions in a company's journal before they are posted to the general ledger.

Posting Process

The act of transferring entries from the journal to the respective ledger accounts to keep financial records accurate and up-to-date.