-Refer to the Above Diagram for a Specific Economy

question 88

Multiple Choice

-Refer to the above diagram for a specific economy.Which of the following best describes a decision by policymakers which moves this economy from point b to point a?

• A) Policymakers have instituted an expansionary money policy and/or a budgetary deficit,thereby accepting more unemployment to reduce the rate of inflation.
• B) Policymakers have instituted a tight money policy and/or a budgetary surplus,thereby accepting a higher rate of inflation to reduce unemployment.
• C) Policymakers have instituted an expansionary money and/or a budgetary deficit,thereby accepting a higher rate of inflation to reduce unemployment.
• D) Policymakers have instituted a tight money policy and/or a budgetary surplus,thereby accepting more unemployment to reduce the rate of inflation.

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Definitions:

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as net profit divided by the cost of the investment.

Average Total Assets

A financial metric that represents the average value of all the assets owned by a company over a specific time period.

Operating Expenses

The costs associated with running a day-to-day business operation, excluding the cost of goods sold.

Residual Income

The income that remains after all personal debts and expenses have been paid, or in business, the net income after deducting cost of capital from operating profit.