Suppose the Economy Has a High Level of Unemployment and a Low

question 140

Multiple Choice

Suppose the economy has a high level of unemployment and a low level of aggregate output.Which of the following policies could the government implement to alleviate these conditions?

• A)an expansionary fiscal policy that increases tax rates
• B)a contractionary fiscal policy that increases government purchases
• C)automatic fiscal stabilizers
• D)a contractionary fiscal policy that increases tax rates
• E)an expansionary fiscal policy that increases government purchases

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Definitions:

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