When x increases leading decrease in output,a better policy tool is
A)decrease in policy rate.
B)increase in policy rate.
C)increase in government spending.
D)decrease in government spending.

Question

Quizplus · Accepted Answer

A decrease in the policy rate can stimulate economic activity by making borrowing cheaper, which can counteract the decrease in output when x increases.

When X Increases Leading Decrease in Output,a Better Policy Tool