Introduction to Economics 2 Deneme Sınavı Sorusu #350020

What should be the direction of fiscal policy when the inflationary gap in the economy is wanted to be eliminated by using aggregate expenditure function?


Neutral

 

Contractionary

 

Expansionary

 

Equitable

Fiscal policy cannot be used


Yanıt Açıklaması:

According to the Keynesian model, the reason of inflation is the excess of aggregate spending. So, trying to buy more goods and services than the economy can produce causes inflation. As an appropriate policy against inflation, the government needs to adopt policies decreasing aggregate spending or increasing taxes or applying both measures. Arranging fiscal policy for depressing aggregate spending is called as contractionary fiscal policy.

Yorumlar
  • 0 Yorum