Coutercyclical policy, restrictive policy, or expansionary policy aggregate dema

Question

Coutercyclical policy, restrictive policy, or expansionary policy

aggregate demand, short run aggregate supply, or long run aggregate supply.

3. The Keynesian view of fiscal policy Which of the following could cause a decrease in the budget deficit? Check all that apply. Restrictive fiscal policy An economic recession An economic expansion Expansionary fiscal policy True or False: Keynesian economists argue that the government can fight inflation by implementing expansionary fiscal policy. False True Keynesian theory stresses the importance of to offset fluctuations in

Explanation / Answer

A. Expansionary Fiscal Policy and an economic recession

Explanation: Less government expenditure and higher taxes can reduce the budget deficit

B. False.

Explanation: It can be implemented by contractionary fiscal policy

C. Keynesians stressed the importance of countercyclical policy to offset fluctuations in aggregate demand.

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