If the Public Expects the Incumbent Administration to Stimulate the Economy

question 17

Multiple Choice

If the public expects the incumbent administration to stimulate the economy shortly before an election:

• A)the unemployment rate will fall at the cost of higher inflation.
• B)the economy will move up the short-run Phillips curve.
• C)lower inflation will prevail, and the rate of unemployment will remain unchanged.
• D)the economy will immediately move up the long-run Phillips curve.
• E)neither inflation nor the unemployment rate will change.

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Definitions:

Political Conservatives

Individuals or groups who advocate for maintaining traditional institutions, values, and practices, often emphasizing limited government, personal responsibility, and free-market economy.

Welfare State

A government system that provides social and economic support to its citizens, such as healthcare, education, and social security.

Political Liberals

Individuals or groups advocating for progressive reforms, emphasizing personal freedoms, and supporting policies for social and economic equality.

Income Inequality

The unequal distribution of income among individuals or households within a society or country.