If the Economy Is Hit by a Negative Real Shock

question 124

Multiple Choice

If the economy is hit by a negative real shock that raises inflation and unemployment,which fiscal policy action should the government take in order to keep inflation and unemployment stable?

• A) cut taxes
• B) raise taxes
• C) increase government spending
• D) No government action can achieve those goals.

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Definitions:

Gender Differences

Variations in characteristics, behaviors, physical and psychological traits, and social roles based on someone's gender.

Adulthood

The stage of human development during which an individual is considered to be fully grown or mature, typically marked by a certain legal or chronological age.

Body Language

Non-verbal communication by means of a sender’s bodily motions, facial expressions, or physical location.

Senders

Individuals or entities that initiate a message in the communication process, aiming to convey information to a receiver.