Fiscal policy focuses on manipulating _____.
a. aggregate demand to smooth out business fluctuations
b. aggregate supply to smooth out business fluctuations
c. both aggregate supply and aggregate demand to smooth out business fluctuations
d. aggregate demand to stimulate the economy and aggregate supply to contract it
e. short-run aggregate supply to stimulate the economy and aggregate demand to contract it
Question 2
Constant returns to scale cause the long-run average cost curve to be:
a. horizontal.
b. vertical.
c. upward-sloping.
d. downward-sloping.
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