1.During a recession, if a government uses an expansionary fiscal policy to incr
ID: 1202053 • Letter: 1
Question
1.During a recession, if a government uses an expansionary fiscal policy to increase GDP, the:
aggregate supply curve will shift to the right.
aggregate supply curve will shift to the left.
aggregate demand curve will shift to the left.
aggregate demand curve will shift to the right.
____________ is a completely inadequate mechanism ____________________ in a modern advanced economy.
Currency; for providing a medium of exchange
Money; for providing a store of value
Barter; for trying to coordinate trades
Money; to use as a unit of account
aggregate supply curve will shift to the right.
aggregate supply curve will shift to the left.
aggregate demand curve will shift to the left.
aggregate demand curve will shift to the right.
Explanation / Answer
(1)
During a recession, if a government uses an expansionary fiscal policy to increase GDP, the aggregate demand curve will shift to the right. The correct answer is option (D). The expaisonary fiscal policy is a type of tax cut which works upon increase in the supply of money.
(2)
Barter is a completely inadequate mechanism for trying to coordinate trades in a modern advanced economy. The correct answer is option (C). It is a system of trade where goods and services are exchanged without using a medium of exchange. It is a money exchange method where the currency exchnage is unstable.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.