Contractionary fiscal policy is deliberate government action to influence aggregate demand and the level of real GDP through:
a. expanding and contracting the money supply.
b. encouraging business to expand or contract investment.
c. regulating net exports.
d. decreasing government spending or increasing taxes.
d
You might also like to view...
Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is less than one, a decrease in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
If the government decreases spending and taxes by 1,000 units and the marginal propensity to consume is .9, then
a. more information is needed. b. output will decrease by 900. c. output will decrease by 10,000. d. output will increase by 10,000.