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During a recession, if a government uses an expansionary fiscal policy to increase GDP, the: Question...

During a recession, if a government uses an expansionary fiscal policy to increase GDP, the:

Question 21 options:

a)

aggregate supply curve will shift to the right.

b)

aggregate supply curve will shift to the left.

c)

aggregate demand curve will shift to the left.

d)

aggregate demand curve will shift to the right.

Suppose the government passes a new law that decreases tax rates. This policy is…

Question 22 options:

a)

automatic and expansionary

b)

automatic and contractionary

c)

discretionary and expansionary

d)

discretionary and contractionary
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Answer #1

21) When the government uses an expansionary fiscal policy to increase GDP, then the AD curve will shift to the right

option(D)

22) When the government passes a new law that decreases tax rates, the policy is discretionary and expansionary

option(C)

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