27. To combat inflation, the federal government could apply which fiscal policy?

Question 27 options:

	sell government bonds
	decrease taxes
	raise interest rates
	decrease government spending

42.

Consumption expenditure (billions of 2002 dollars per year) 800 450 line Consumption 600 500 400 260 200 100 0 200 260 500 800 Disposable income (billions of 2002 dollars per year) This figure describes the relationship between consumption expenditure and disposable income for an economy. Refer to Figure 27.1.1. Consumption and disposable income are equal O when disposable income is greater than or equal to $500 billion O when disposable income is $500 billion at all points along the consumption function O when saving equals $40 billion and disposable income equals $540 billion