In the 1970s, the U

question 48

Multiple Choice

In the 1970s, the U.S.economy experienced both inflation and unemployment.This led economists to recognize that
I.stabilization was a much more difficult task than many economists anticipated.
II.the Keynesian doctrine correctly asserts that reducing inflation and unemployment can be addressed by fiscal policies.
III.shifts in aggregate could frustrate policymaking efforts whereas shifts in the short-run
Aggregate were more easily addressed.

Definitions:

Supply-side

An economic theory that emphasizes the role of supply in fostering economic growth by reducing taxes and decreasing regulation, with the intent of increasing production.

Monetarism

A school of economics that places paramount importance on money as the key determinant of the level of prices, income, and employment.

Velocity of Circulation

The rate at which money is exchanged in an economy, often used to represent the activity level in the financial system.

Expected Profit Rate

The anticipated return on an investment, taking into account both the probability of gains and the risk of losses.