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
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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