Other Things Constant, Which of the Following Would Reduce Unemployment

question 15

Multiple Choice

Other things constant, which of the following would reduce unemployment and raise inflation?

• A)The government lowers government spending.
• B)Because of low growth abroad, net exports falls.
• C)The government raises taxes.
• D)Businesses become more optimistic about the future of the economy.

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Definitions:

Maximum

The highest point on a nonlinear curve, where the slope changes from positive to negative.

Diminishing Marginal Utility

A principle stating that as a person consumes more of a good, the additional satisfaction or utility from consuming an additional unit decreases.

Total Utility

The total satisfaction received from consuming a particular quantity of goods or services.

Marginal Utility

The added satisfaction a consumer gets from having one more unit of a good or service.