Suppose the Economy Has a High Level of Unemployment

question 252

Multiple Choice

Suppose the economy has a high level of unemployment. This would imply

• A)that the government should engage in expansionary fiscal policy and increase the tax rate.
• B)that the economy is operating to the left of the LRAS curve and that government spending could be increased to reduce unemployment.
• C)that fiscal policy has been ineffective and should be abandoned.
• D)that the economy is operating on the SRAS curve and that government spending could be decreased to reduce unemployment.

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Definitions:

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body, enabling communication and coordination.

Opiates

A group of drugs derived from opium that are used for their analgesic (pain relief) properties, but are also highly addictive.

Electrical Activity

The movement of electrically charged particles, such as electrons, which is fundamental to the operation of electronic devices and biological systems like the human brain.

ERPs

Event-Related Potentials, which are measured brain responses that are the direct result of a specific sensory, cognitive, or motor event.