Those who desire that policymakers stabilize the economy would advocate which of the following when aggregate demand is insufficient to ensure full employment?

Question

Quizplus · Accepted Answer

Decreasing taxes would increase disposable income, which would lead to an increase in consumption and increase aggregate demand, thus stabilizing the economy. Decreasing the money supply or government expenditures would decrease aggregate demand, worsening the problem. Decreasing the government deficit would not have an immediate impact on aggregate demand.

Those Who Desire That Policymakers Stabilize the Economy Would Advocate