According to the Great Moderation consensus, expansionary fiscal policy will shift the aggregate demand curve to the _____ and lead to a _____ level of output and a _____ level of employment in the short run.
A)right; higher; higher
B)left; lower; lower
C)right; higher; lower
D)left; lower; higher

Question

Quizplus · Accepted Answer

Expansionary fiscal policy increases aggregate demand, shifting the demand curve to the right, resulting in higher output and employment in the short run.

According to the Great Moderation Consensus, Expansionary Fiscal Policy Will