Which Set of Fiscal Policies Would Tend to Offset Each

question 65

Multiple Choice

Which set of fiscal policies would tend to offset each other?

• A)a decrease in government spending and taxes
• B)a decrease in government spending and no change in taxes
• C)an increase in government spending and a decrease in taxes
• D)a decrease in government spending and an increase in taxes

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Definitions:

Natural Rate

Often referred to as the natural rate of unemployment, it is the level of unemployment at which there is no cyclical or deficient-demand unemployment, commonly seen as the equilibrium state of the labor market.

Unemployment Rates

The quantity of individuals in the workforce who are unemployed and making efforts to find job opportunities.

Unemployment Rate

The percentage of the labor force that is unemployed and actively looking for employment.

Labor Force Statistics

Data and metrics that provide information about the employment and unemployment rates, workforce composition, and other labor market indicators.