In response to the 2008 recession, New Zealand's Finance Minister Bill English stated that "... the 7 billion New Zealand dollars would be allocated to new infrastructure spending, providing financial aid to workers hit by layoffs as the economy slows and includes tax cuts planned for April."
Www)iht.com, 11/26/2008
New Zealand's government expects the policies to shift the ________ but at this point in time the ________ might weaken its ability to affect real GDP.

Question

Quizplus · Accepted Answer

The policies mentioned in the statement, such as new infrastructure spending, financial aid to workers, and tax cuts, are designed to stimulate aggregate demand (AD) and shift the AD curve rightward. However, it is unclear how quickly these policies will have an impact on the economy due to the impact lag, which refers to the time it takes for policy changes to affect the economy. Therefore, the best choice is D: AD curve rightward; impact lag.

In Response to the 2008 Recession, New Zealand's Finance Minister