Suppose the economy is at a short run equilibrium in recession.Which of the following fiscal policies would decrease output and prices in the short run?
A) an increase in government spending
B) a reduction in taxes
C) an increase in taxes
D) an increase in interest rates
Correct Answer:
Verified
Q24: To close a recessionary gap through fiscal
Q28: If the government increases taxes,then the
A)short-run aggregate
Q29: Which of the following statements about fiscal
Q30: Suppose the economy is in equilibrium on
Q31: According to traditional Keynesian analysis,fiscal policy operates
Q32: If the government decreases taxes,then the
A)short-run aggregate
Q34: Suppose there is a contractionary gap and
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Q37: If the government increases aggregate demand when
Q38: To shift the aggregate demand curve inward
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