Question

If the government of the country of LiLand want to promote economic activity and increase Aggregate...

If the government of the country of LiLand want to promote economic activity and increase Aggregate Demand, it should

Group of answer choices

cut funding to government agencies to reduce the budget deficit.

increase taxes on imported products and gasoline.

pass a new spending bill to fund new infrastructure projects.

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Homework Answers

Answer #1

Ans: pass a new spending bill to fund new infrastructure projects.

Explanation:

If the government wants to increase money supply and aggrgate demand in the economy , then it will adopt an expansionary fiscal policy.

An expansionary fiscal policy cosists of ;

  • Increase in government spending
  • Reduction of tax rate or tax cut

So , if the government of the country of LiLand want to promote economic activity and increase Aggregate Demand, it should pass a new spending bill to fund new infrastructure projects.

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