The Traditional Phillips Curve Suggests That, If Government Uses an Expansionary

question 114

Multiple Choice

The traditional Phillips Curve suggests that, if government uses an expansionary fiscal policy to stimulate output and employment,

• A) unemployment may actually increase because of the crowding-out effect.
• B) tax revenues may increase even though tax rates have been reduced.
• C) the inflation rate will increase.
• D) the natural rate of unemployment may fall.

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Definitions:

Amenorrhea

The absence of menstruation in someone of reproductive age under conditions not including pregnancy or menopause.

Anorexia

A mental health condition where the individual experiences dangerously low body weight, an intense aversion to gaining weight, and a false perception of their body's weight or shape.

Hypokalemia

A condition characterized by lower than normal levels of potassium in the bloodstream.

Multidimensional

Having several identifiable dimensions, aspects, or factors that contribute to a particular outcome or phenomenon.