BUSINESS ADMINISTRATION
BUSINESS POLICY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
decreasing taxes.
|
|
|
decreasing spending.
|
|
|
decreasing the money supply.
|
|
|
decreasing the reserve requirement.
|
Detailed explanation-1: -Increasing government spending on infrastructure that further increases the private sector productivity can increase the aggregate supply.
Detailed explanation-2: -When inflation is too strong, the economy may need a slowdown. In such a situation, a government can use fiscal policy to increase taxes to suck money out of the economy. Fiscal policy could also dictate a decrease in government spending and thereby decrease the money in circulation.
Detailed explanation-3: -Which of the following would be considered a fiscal policy action? A tax cut is designed to stimulate spending during a recession. increasing government purchases or decreasing taxes.
Detailed explanation-4: -Automatic stabilizers are mechanisms built into government budgets, without any vote from legislators, that increase spending or decrease taxes when the economy slows.