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Economic theory
________ does not give a clear prediction about whether a higher rate of return would increase saving.
Monetary policy
________ affects aggregate demand primarily by changing interest rates.
Policymakers
________ should boost government spending, cut taxes, and expand the money supply.
Fiscal policy
________ works with a lag because of the long political process that governs changes in spending and taxes.
aggregate demand
Takes time for changes in interest rates to alter the ________ for goods and services.
Inflation
________ allows for the possibility of negative real interest rates.
Budget deficits
________ represent negative public savings.
Monetary/fiscal policy
can stabilize aggregate demand.
Tax cuts
________ have important influence on both aggregate demand and aggregate supply.
Zero
________ provides a more natural focal point for policymakers than any other number.
aggregate income
The fall in ________ is concentrated on those workers who lose their jobs.
new plant
When the saving rate is higher, more resources are available for investment in ________ and equipment.
Policymakers
________ should cut government spending, raise taxes, and reduce the money supply.
aggregate demand
They increase ________ by increasing households disposable income.
Note 
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