The best case scenario for fiscal policy is during a:
A. boom caused by an aggregate demand shock.
B. recession caused by an aggregate demand shock.
C. boom caused by a real shock.
D. recession caused by a real shock.
Answer: B. recession caused by an aggregate demand shock.
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All of the following are ways in which the government can help insure the quality of information consumers receive except
A) enforcing truth-in-advertising standards. B) awarding monopolies to political supporters and family members. C) requiring businesses to undergo audits of their financial conditions. D) publishing the academic performance of schools.
Suppose that a small economy that produces mostly agricultural goods experiences a year with exceptionally good conditions for growing crops. The good weather would
a. shift both the short-run aggregate supply and the short-run Phillips curve right. b. shift both the short-run aggregate supply and the short-run Phillips curve left. c. shift the short-run aggregate supply curve to the right, and the short-run Phillips curve to the left. d. shift the short-run aggregate supply curve to the left, and the short-run Phillips curve to the right.