If the economy is experiencing inflation, then the most appropriate government policy would be to:
A. shift the aggregate demand curve by using a tax increase coupled with spending cuts.
B. shift the aggregate demand curve by using a tax increase coupled with more spending.
C. shift the aggregate demand curve by using a tax cut coupled with spending cuts.
D. shift the aggregate supply curve by using a tax cut coupled with more spending.
Answer: A
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The ratio of the dollar price of a toy in the U.S. to the dollar price of a toy in China represents the ________ between the two currencies
A) nominal exchange rate B) ordinal exchange rate C) expected exchange rate D) real exchange rate
Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. What is the opportunity cost of producing coffee in Chile?
a. Half a pound of sugar b. Two-fifth of a pound of sugar c. 2 pounds of sugar d. One-third of a pound of sugar e. 4 pounds of sugar