If Policy Makers Choose to Use a Contractionary Fiscal Policy

question 47

Multiple Choice

If policy makers choose to use a contractionary fiscal policy as a response to the recession caused by a negative supply shock, _____.

• A)both aggregate output and inflation will increase
• B)both aggregate output and unemployment level will increase
• C)aggregate output will and unemployment will increase
• D)aggregate output will increase and unemployment will decrease
• E)both unemployment and prices will decrease

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Definitions:

Medical Consultation

A professional meeting between a patient and a healthcare provider to diagnose health issues and discuss treatment options.

Intruding Thoughts

Unwanted, involuntary thoughts, images, or impulses that can be distressing or disturbing to the individual.

Attitudinal Foundation

The underlying beliefs and values that shape an individual's attitudes and behaviors.

Accepting

The process of recognizing and coming to terms with the reality of a situation, emotion, or outcome without attempting to change it, protest, or exit.