Governments can help combat unemployment and inflation because they have the power to
a. decrease aggregate demand to attack unemployment and increase aggregate demand to attack inflation
b. increase aggregate supply to attack unemployment and decrease aggregate demand to attack inflation
c. increase aggregate supply to attack unemployment and decrease aggregate supply to attack inflation
d. increase aggregate demand to attack unemployment and increase aggregate demand to attack inflation
e. increase aggregate demand to attack unemployment and decrease aggregate demand to attack inflation
E
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In periods when GDP fails to grow at its normal rate, the actual unemployment rate will be ________ than the natural rate of unemployment
A) higher B) falling faster C) lower D) the same
Which of the following would cause the U.S. money supply to expand?
a. a commercial bank calling in a loan to build up more excess reserves b. a commercial bank purchasing U.S. securities from the Fed as an investment c. a decrease in reserve requirements d. an increase in the discount rate
When determining inflation, the price level in each period is typically reported as an index number, rather than as the _______________ amount for buying the basket of goods.
a. total b. relative c. dollar d. combined
When deflation exists,
a. the real interest rate is less than the nominal interest rate. b. the real interest rate is greater than the nominal interest rate. c. the real interest rate and inflation are less than the nominal interest rate. d. prices rise.