Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 34 - Part XII - The Influence of Monetary and Fiscal Policy on Aggregate Demand - Quick Check Multiple Choice - Page 767: 6

Answer

a) more people become eligible for unemployment insurance benefits

Work Step by Step

When the economy goes into a recession, there are fewer people working. The aggregate demand curve shifts to the left. However, to correct the shift to the left, the government can step in and provide benefits to shift the aggregate demand curve to the right. The benefits that best shift the aggregate demand curve to the right (from the government) are unemployment benefits.
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