If the Unemployment Rate Rises,which Policies Would Be Appropriate to Reduce

question 27

Multiple Choice

If the unemployment rate rises,which policies would be appropriate to reduce it?

• A)increase the money supply,increase taxes
• B)increase the money supply,cut taxes
• C)decrease the money supply,increase taxes
• D)decrease the money supply,cut taxes

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Definitions:

Inferior Good

A type of product for which demand decreases as the income of the consumer increases.

Cross Elasticity

Cross elasticity of demand measures the responsiveness of the demand for a good to a change in the price of another good, identifying substitute or complementary relationships.

Quantity Demanded

The total amount of goods or services that consumers are willing and able to buy at a specific price level, at a given point in time.

Normal Good

A type of good for which demand increases as the income of consumers increases, and vice versa.