Question
To address a recessionary gap, the appropriate fiscal policy would be an increase in:
A. personal taxes.
B. corporate taxes.
C. government spending.
D. interest rates.
8. The effect of expansionary fiscal policy is to shift aggregate:
A. supply to the left.
B. supply to the right.
C. demand to the left.
D. demand to the right. To address a recessionary gap, the appropriate fiscal policy would be an increase in:
A. personal taxes.
B. corporate taxes.
C. government spending.
D. interest rates.
8. The effect of expansionary fiscal policy is to shift aggregate:
A. supply to the left.
B. supply to the right.
C. demand to the left.
D. demand to the right. To address a recessionary gap, the appropriate fiscal policy would be an increase in:
A. personal taxes.
B. corporate taxes.
C. government spending.
D. interest rates.
Explanation / Answer
C. government spending.