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:

Biomedicine

A branch of medical science that applies biological and physiological principles to clinical practice, often focusing on the diagnosis and treatment of diseases.

Indigenous Health Systems

Traditional healing practices and beliefs utilized by indigenous communities, often based on holistic and ancestral knowledge.

Psychotic

Relating to psychosis, a mental disorder characterized by a disconnection from reality, often manifesting as hallucinations or delusions.

Neurotic

Relating to, affected by, or characteristic of neurosis, a class of functional mental disorders involving distress but neither delusions nor hallucinations.