If an Economy Were Experiencing a High Rate of Unemployment

question 23

Multiple Choice

If an economy were experiencing a high rate of unemployment as the result of weak aggregate demand, a Keynesian economist would be most likely to recommend

• A) a reduction in taxes coupled with a reduction in government expenditures of equal size.
• B) an increase in government expenditures coupled with an increase in taxes of equal size.
• C) a reduction in taxes, without any offsetting reduction in government expenditures.
• D) maintenance of a balanced budget.

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Definitions:

Sympathetic Nervous System

A part of the autonomic nervous system that activates what is often termed the fight or flight response during stressful situations.

Psychoneuroimmunology

The study of how psychological factors, the nervous system, and the immune system interact with each other.

Psychological

Pertaining to the mind or mental processes, especially in relation to behavior and emotions.

Neural

Pertaining to neurons or the nervous system, often in the context of neural networks in biology or artificial intelligence.