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MMLU / The U.S. economy currently suffers a recessionary gap and a budget deficit…

Problem

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question

The U.S. economy currently suffers a recessionary gap and a budget deficit exists. If the government wishes to fix the recession which of the following choices best describes the appropriate fiscal policy the impact on the market for loanable funds the interest rate and the market for the U.S. dollar? FISCAL POLICY     LOANABLE FUNDS     INTEREST RATE     MARKET FOR $

choices

  1. Tax increase     Demand rises     Falling     Demand falls
  2. Tax cut     Supply rises     rising     Demand rises
  3. Tax cut     Demand rises     rising     Demand rises
  4. Tax increase     Supply falls     Falling     Demand rises

subject

high_school_macroeconomics

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