If the Fiscal Policy Makers Aim to Increase Aggregate Demand

question 37

Multiple Choice

If the fiscal policy makers aim to increase aggregate demand, they will likely enact:

• A) expansionary fiscal policy.
• B) contractionary fiscal policy.
• C) expansionary monetary policy.
• D) contractionary monetary policy.

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Definitions:

Demand Decreased

A situation where the desire or need for a certain product or service declines, leading to a decrease in its quantity demanded at a given price.

Quantity Supplied

The total amount of a specific good or service that producers are willing and able to sell at a given price within a specified period.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a particular price.

Equilibrium

A state where supply equals demand in a market, resulting in no inherent force for price change.