When Both Inflation and Unemployment Are Concerns, Supply-Side Economists Argue

question 98

Multiple Choice

When both inflation and unemployment are concerns, supply-side economists argue in favor of policies to shift the

• A) aggregate supply curve to the right and lower the CPI, while Keynesian fiscal policy would shift the aggregate demand curve to the right and increase the CPI.
• B) aggregate supply curve to the left and raise the CPI, while Keynesian fiscal policy would shift the aggregate demand curve to the left and decrease the CPI.
• C) aggregate supply curve to the right and lower the CPI, which is the same policy Keynesian economists would advocate.
• D) aggregate demand curve to the right because unemployment is a more important concern than inflation.

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