To eliminate an inflationary gap using fiscal policy, the government could
A) only decrease taxes.
B) increase taxes.
C) increase government expenditure on goods and services and simultaneously decrease taxes by an equal amount.
D) increase government expenditure on goods and services and simultaneously increase taxes by an equal amount.
E) decrease the quantity of money.
Correct Answer:
Verified
Q105: The government collects tax revenues of $100
Q106: Q107: Q108: If government expenditure on goods and services Q109: Automatic stabilizers include Q111: When the government's outlays equal its tax Q112: If a change in the tax laws Q113: Induced taxes are defined as taxes Q114: If the federal government has a budget Q115: Automatic stabilizers
A)changes in the federal funds
A)that are
A)have no effect on the magnitude
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents