Many Economists Believe That If Fiscal Policy Turns Contractionary to Reduce

Multiple Choice

Many economists believe that if fiscal policy turns contractionary to reduce the deficit,

A) monetary policy can turn expansionary to counteract the effects on aggregate demand.
B) monetary policy must be contractionary to reinforce the good effects of contractionary fiscal policy.
C) foreign investment in the United States must be encouraged.
D) taxes on the earnings from stock market gains should be increased.