Which of the following policy options would not be used to eliminate an inflationary gap?
a. Decrease government spending.
b. Decrease consumption.
c. Increase investment.
d. Decrease taxes.
c
Economics
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Why do economists predict that investment increases when the real rate of interest falls?
What will be an ideal response?
Economics
Which of the following is not an assumption of the Cournot model presented in the text?
A. Both firms maximize profits. B. If the first firm cuts price, the second firm will follow and if the first raises price, the second will not follow. C. There are two firms in an industry. D. Each firm takes the output of the other firm as given.
Economics