Other Things Equal,which of the Following Will Lead to an Increase

question 13

Multiple Choice

Other things equal,which of the following will lead to an increase in output and employment?

• A) The federal government decides to eliminate the Department of Education.
• B) The federal government implements a national value-added tax (VAT).
• C) The federal government passes a tax incentive for firms that employ returning war veterans.
• D) The federal government reduces the duration and amount of unemployment benefits.

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Definitions:

Deflation

A decrease in the general price level of goods and services, often indicating a contraction in the economy.

Misery Index

An economic indicator created by adding the unemployment rate to the inflation rate, proposing to reflect the average citizen's financial discomfort.

Nominal Interest Rate

The rate of interest before adjusting for inflation, representing the face value of interest payments.

Inflation

The speed at which the overall price level for goods and services increases, causing a decline in the value of money.