If Government Uses Its Stabilization Policies to Maintain Full Employment

question 9

Multiple Choice

If government uses its stabilization policies to maintain full employment under conditions of cost- push inflation,

• A) a deflationary spiral is likely to occur.
• B) an inflationary spiral is likely to occur.
• C) stagflation is likely to occur.
• D) the Phillips Curve is likely to shift inward.

---

Definitions:

Disclosure

The action of making new or secret information known.

Smoking

The act of inhaling and exhaling the smoke of burning plant material, most commonly tobacco, which is known to cause health problems.

Drinking

The act of consuming liquids; in many contexts, it refers specifically to the consumption of alcohol.

Teenage Pregnancies

Refers to pregnancies occurring in individuals who are in their teenage years, often bringing unique social, economic, and health challenges.