If there is an inflationary gap in the economy, discretionary fiscal policy would likely involve an action to
A) shift the aggregate demand curve to the right.
B) shift the aggregate demand curve to the left.
C) shift both the aggregate demand curve and aggregate supply curve to the right.
D) shift both the aggregate demand curve and aggregate supply curve to the left.
Ans: B) shift the aggregate demand curve to the left.
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Which of the following leads a good to have a high elasticity of supply? I. The good must be produced using unique resources. II. The good is produced using commonly available resources
A) I only B) II only C) I and II D) neither I nor II
What happens when consumers react to an increase in a good's price by consuming less of that good and more of other goods
a. elasticity of demand b. substitution effect c. law of demand d. complement e. substitute