Refer to the above diagram. The economy is at equilibrium at point A. What fiscal policy would be most appropriate to control demand-pull inflation?
A. Decrease aggregate demand by increasing taxes.
B. Increase aggregate demand by increasing government spending.
C. Increase aggregate demand by decreasing taxes.
D. Decrease aggregate supply by increasing taxes.
Answer: A
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The labor supply curve is obtained by
a. summing the slopes of the marginal revenue product curves for individual firms b. summing the upward-sloping portions of individual workers' labor supply curves c. summing all individual workers' labor supply curves at each wage d. summing the downward-sloping portions of individual workers' labor supply curves e. averaging all individual workers' labor supply curves at each wage
Refer to the given data. At the $100 level of income, the average propensity to save is:
A. .10.
B. .20.
C. .25.
D. .90.