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Question : The intervention of the government whether to expand demand or reduce it constitutes the ________.

Option 1: stabilisation function

Option 2: redistribution function

Option 3: expenditure function

Option 4: transition function


Team Careers360 4th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: stabilisation function


Solution : The correct answer is the stabilisation function .

The stabilisation function is any action taken by the government to raise or lower the economy's aggregate demand. Aggregate demand, which in turn depends on government and private expenditure, determines the total level of employment and prices in the economy.

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