Proponents of deficit reduction argue that the principal effect will be an
A)outward shift of the aggregate supply curve.
B)inward shift of the aggregate supply curve.
C)outward shift of the aggregate demand curve.
D)inward shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

Reducing the deficit can lead to lower interest rates and increased investment, which can enhance productivity and shift the aggregate supply curve outward.

Proponents of Deficit Reduction Argue That the Principal Effect Will