A contractionary fiscal policy shifts the aggregate demand curve
A) to the right and is used to close an inflationary gap.
B) to the right and is used to close a recessionary gap.
C) to the left and is used to close an inflationary gap.
D) to the left and is used to close a recessionary gap.
Ans: C) to the left and is used to close an inflationary gap.
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
In order to smooth the influence of shocks throughout an economy, it is helpful for governments within a monetary union to have
A) ways to conduct fiscal transfers. B) seignorage. C) currency competition. D) monetary autonomy.