What would be appropriate government action to close an inflationary gap?
A) Use policy to decrease aggregate supply.
B) Use policy to decrease potential GDP.
C) Use counter-cyclical fiscal policy to decrease aggregate demand.
D) Use counter-cyclical fiscal policy to increase aggregate demand.
Correct Answer:
Verified
Q16: What is a budget deficit?
A)It is government
Q17: Q18: Q19: Which of the following is a correct Q20: What is net tax revenue in excess Q22: Which of the following would help reduce Q23: If the government used counter-cyclical policy to Q24: Graphically,what would cause the aggregate demand curve Q25: Those who advocate counter-cyclical fiscal policy would Q26: Graphically,what happened to the aggregate demand curve
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