In a Situation of Stagflation, the Use of Aggregate Demand-Oriented

question 3

Multiple Choice

In a situation of stagflation, the use of aggregate demand-oriented macro policy to address the problem of the rising price level would, at least in the short run, __________ the price level and __________ the level of output in the economy.

• A) increase; increase
• B) increase; decrease
• C) decrease; increase
• D) decrease; decrease

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Definitions:

Radioisotopes

Isotopes of elements that are radioactive, undergoing decay and emitting radiation in the process.

Fossil

Any past evidence of an organism that has been preserved in the Earth’s crust.

Billion Years

A period of time equal to one thousand million (1,000,000,000) years, often used to express the age of the Earth or the universe.