During a Period When Output and Employment Is Falling, the Government

question 25

Multiple Choice

During a period when output and employment is falling, the government will try to:

• A) Increase tax rates
• B) Increase interest rates
• C) Reduce government spending
• D) Stimulate borrowing and spending

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Definitions:

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a stock or another security at a specified price before the contract expires.