When Aggregate Demand Is Low Enough to Drive Unemployment Above

question 116

Multiple Choice

When aggregate demand is low enough to drive unemployment above the natural rate,

• A) there is downward pressure on the price level,and the government may want to conduct contractionary fiscal policy.
• B) the economy is entering into an expansion,and the government may want to conduct contractionary fiscal policy.
• C) there is upward pressure on the price level,and the government may want to conduct contractionary fiscal policy.
• D) there is upward pressure on the price level,and the government may want to conduct expansionary fiscal policy.
• E) there is downward pressure on the price level,and the government may want to conduct expansionary fiscal policy.

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