Expansionary Fiscal Policy Can Be Used to Reduce Unemployment by

question 93

Multiple Choice

Expansionary fiscal policy can be used to reduce unemployment by

• A)increasing long-run aggregate supply so as to raise real GDP.
• B)increasing aggregate demand so as to raise real GDP.
• C)reducing nominal wages so as to encourage firms to hire more workers.
• D)eliminating inefficiencies from labor markets.

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Definitions:

Analyze Price Competitors

The process of examining the pricing strategies of competitors in the market to understand their impact on sales and positioning.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance premiums.

Small

Referring to something of limited size, amount, or scale when compared to others of the same category.

Sensitivity

The quality of being easily affected by outside forces or influences, often used in discussing market sensitivity to price changes or consumer sensitivity to environmental issues.