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 hence increase aggregate demand, thus stabilizing the economy. Decreasing the money supply, decreasing government expenditures, or doing nothing would all lead to a decrease in aggregate demand and potentially exacerbate the situation.

Those Who Desire That Policymakers Stabilize the Economy Would Advocate