Which statement about fiscal policy and aggregate supply is correct?

Question

Quizplus · Accepted Answer

Fiscal policies that influence aggregate supply, such as investments in technology or infrastructure, can increase both output and the price level, without necessarily requiring a tradeoff between the two. Option A is incorrect because while reducing unemployment may be a desired outcome of fiscal policy, it is not the sole focus when it comes to aggregate supply. Option C is also incorrect because the implementation time for policies that influence aggregate supply can vary. Option D is incorrect because while there may be concerns about inflationary pressures, this is not always the case and depends on the specific policy and its implementation.

Which Statement About Fiscal Policy and Aggregate Supply Is Correct