To correct deficient demand, the government should

cut its spending and raise taxesCorrect answerYour answerraise its spending on public works and cut taxesCorrect answerYour answerraise the CRRCorrect answerYour answerrun a budget surplusCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

More spending and lower taxes raise AD, which raises output and jobs through the multiplier.

Concept: Fiscal policy for deficient demand
Typical timeTypical: 70 s
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The rule this testsFiscal measures

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Ten questions from Excess & Deficient Demand, at your own pace.

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Ten questions from Excess & Deficient Demand, at your own pace.

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To correct deficient demand, the government should

Explanation