When Inflation and Unemployment Are Both Higher Than Desired, Most

question 57

Multiple Choice

When inflation and unemployment are both higher than desired, most economists believe that the government should:

• A)adopt contractionary monetary policies that reduce both inflation and unemployment.
• B)adopt expansionary fiscal policies that reduce both inflation and unemployment.
• C)determine whether reducing inflation is more or less important than reducing unemployment and adopt a policy that targets the more important goal.
• D)not act as it is impossible to reduce either inflation or unemployment under these circumstances.

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Definitions:

Business Combination

An occurrence or action where a buyer obtains dominance over one or several companies.

Entry Price

Refers to the initial cost at which an asset, security, or investment is purchased, marking the basis for future financial analysis.

Equity Instrument

A financial instrument indicating ownership in an entity, such as common stock or preferred shares, that represents a claim on the entity's residual assets after liabilities have been deducted.

Risk Management Strategy

A process of identifying, assessing, and controlling threats to an organization's capital and earnings.