Which of the Following Contributed to the Increase in the Unemployment

question 104

Multiple Choice

Which of the following contributed to the increase in the unemployment rate in 1983?

• A) The Fed actively tried to increase inflation via contractionary policies.
• B) The Fed actively tried to make the US dollar depreciate via contractionary policies.
• C) The Fed actively tried to reduce inflation via contractionary policies.
• D) The Fed actively tried to make the US dollar appreciate via contractionary policies.

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Definitions:

National Saving

The total amount of savings generated within a country, including both private savings by households and public savings by the government.

Net Capital Outflow

The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreign residents over a certain period.

Equilibrium Real Interest Rate

The interest rate at which the demand for investment equals the supply of savings in an economy, without any inflation being considered.

Domestic Investment

Expenditure on capital within a country that is intended to improve the economy's future production capacity, such as factories, machinery, and infrastructure development.