Suppose Policymakers Take Actions That Cause a Contraction of Aggregate

question 3

Multiple Choice

Suppose policymakers take actions that cause a contraction of aggregate demand.Which of the following is a short-run consequence of this contraction?

• A)The inflation rate decreases.
• B)The level of output decreases.
• C)The unemployment rate increases.
• D)All of the above are correct.

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Definitions:

Radical Behaviorism

An approach in psychology that emphasizes the study of observable behavior and the role of the environment as a determinant of behavior, associated with B.F. Skinner.

Social Anxiety

A form of anxiety characterized by intense fear or discomfort in social situations, where one fears being judged or embarrassed.

Type A Behavior

A personality pattern characterized by high stress levels, impatience, aggressiveness, and a sense of urgency, often linked to heart disease risk.

Heart Disease

A term for various types of heart conditions that include coronary artery disease, heart attack, congestive heart failure, and congenital heart defects, among others.