In response to the 2008 recession, New Zealand's Finance Minister Bill English stated that "... the 7 b New Zealand dollars would be allocated to new infrastructure spending, providing financial aid to hit by layoffs as the economy slows and includes tax cuts planned for April."
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New Zealand's government expects the policies to shift the but at this point in time the
Might weaken its ability to affect real GDP.

Question

Quizplus · Accepted Answer

The government's policies of allocating funds to new infrastructure spending, providing financial aid to those affected by layoffs, and including tax cuts are all aimed at increasing aggregate demand (AD) in the economy. Therefore, the policies are expected to shift the AD curve rightward. However, there will be an impact lag, as it takes time for these policies to take effect and stimulate the economy. The other options (A, B, and C) are not applicable in this context.

In Response to the 2008 Recession, New Zealand's Finance Minister