If Fiscal Policy Makers Increase Aggregate Demand in an Attempt

question 87

Multiple Choice

If fiscal policy makers increase aggregate demand in an attempt to decrease the unemployment rate below the natural rate of unemployment,then

• A)the potential GDP level will decrease
• B)the potential GDP level will increase
• C)the only lasting impact of the policy is a higher price level
• D)the only lasting impact of the policy is greater real GDP
• E)the only lasting impact of the policy is lower real GDP

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Definitions:

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A branch of psychology concerned with understanding how social phenomena influence individual psychological processes.

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The environmental and social variables that influence the norms, behaviors, and practices of an individual or community.

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