If the government wants to expand aggregatedemand, it can _________ government purchases or_________ taxes.a. increase; increaseb. increase; decreasec. decrease; increased. decrease; decrease

If the government wants to expand aggregatedemand, it can _ government purchases or_ taxes.a. increase; increaseb. increase; decreasec. decrease; increased. decrease; decrease

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 1.7P

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Concept explainers

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.

Question

If the government wants to expand aggregate
demand, it can _________ government purchases or
_________ taxes.
a. increase; increase
b. increase; decrease
c. decrease; increase
d. decrease; decrease

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