If Policymakers Use Contractionary Policy to Reduce Inflation, the Unemployment

question 52

Multiple Choice

If policymakers use contractionary policy to reduce inflation, the unemployment rate will be

• A) higher.
• B) below its natural rate.
• C) above its natural rate.
• D) at its natural rate.

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Definitions:

Personal Taxes

Taxes levied on the income or property of individuals.

Personal Income

The total earnings of an individual from all sources before taxes, including wages, dividends, interest, and rents.

Federal Government

the national government of a federal state, which shares power with regional or state governments under a system of federalism.

Individual Income

The total amount of money earned by a person from all sources before taxes.