aggregate demand

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Suppose that aggregate demand has recently increased. This has taken output above the potential level and it has also increased the price level. The government is keen to avoid any further increases in the price level. Which of the following options should it avoid?

a) Simply wait for the labour market to return output to the potential level.

b) Apply a contractionary fiscal policy.

c) Announce a credible zero target for inflation.

d) Apply a supply-side policy to shift LAS to the right? GET A GENUINE 100 % CUSTOM TERM PAPER Answer 2 Scenario Questions Accurately Now

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Suppose that aggregate demand has recently increased. This has taken output above the potential level and it has also increased the price level. The government is keen to avoid any further increases in the price level. Which of the following options should it avoid?

a) Simply wait for the labour market to return output to the potential level.

b) Apply a contractionary fiscal policy.

c) Announce a credible zero target for inflation.

d) Apply a supply-side policy to shift LAS to the right? GET A GENUINE 100 % CUSTOM TERM PAPER Answer 2 Scenario Questions Accurately Now

$12.99

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