If the economy is experiencing an inflationary gap and the government wants to accelerate the adjustment to the long-run equilibrium, it should
A) reduce aggregate demand by cutting government spending or raising taxes.
B) reduce aggregate demand by increasing government spending or cutting taxes.
C) increase aggregate supply by cutting government spending or raising taxes.
D) increase aggregate supply by increasing government spending or lowering taxes.
A
Economics
You might also like to view...
Foreign exchange means
a. changing dollars into foreign currency b. domestic currency held to finance international trade c. foreign currency d. trade between governments e. trade between individuals in different countries
Economics
Financial capital is
A) the collection of stock and bond exchanges around the country. B) funds used to purchase capital goods. C) the foreign exchange market. D) assets of financial institutions.
Economics