Under what scenario could fiscal policy make a recession even worse? Select one:
ID: 1202125 • Letter: U
Question
Under what scenario could fiscal policy make a recession even worse? Select one: If tax cuts are not evenly distributed across income groups If there is no crowding out of private spending If deficit financed fiscal policy increases the national debt to the point scares investors away and decreases spender confidence If the multiple is bigger than 1 When aggregate demand decreases, the Fed will want to use its policy tools to Select one: keep aggregate demand lower until wages catch up. quickly bring aggregate demand back to its original position. shift aggregate supply to left to balance with lower demand. push aggregate demand higher than it was originally to make up for lost growth potential.Explanation / Answer
When aggregate demnad decreases the FED will want its policy tools to- Quickly bring aggregate demand back to its original position.
Under what scenario could fiscal policy make a recession worse- If tax cuts are not evenly distributed across income groups.
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