"Last month unemployment fell to 4 percent, its lowest level in years. The economy is growing rapidly, but consumer prices have risen at an annual rate of 10 percent during the last six months." Which of the following policies would be most appropriate under these circumstances?
a. An increase in both government spending and taxes.
b. An increase in taxes.
c. A reduction in taxes.
d. An increase in government spending.
b
Economics
You might also like to view...
The low interest rates that prevailed after 1942 made World War II (1941–45) financing problems fundamentally the same as World War I (1914–18)
Indicate whether the statement is true or false
Economics
According to classical theory, a shift in aggregate demand will affect
A) the price level only. B) real Gross Domestic Product (GDP) only. C) the level of employment only. D) both real Gross Domestic Product (GDP) and the level of employment.
Economics