Fiscal policy is likely to fail to correct stagflation in an economy because:
a. it affects both aggregate demand and supply, although only aggregate supply needs to be changed
b. it affects both the aggregate demand and supply, although only aggregate demand needs to be changed.
c. it affects aggregate demand only, although aggregate supply needs to changed.
d. it affects aggregate supply only, although only aggregate demand needs to be changed.
e. it affects either aggregate demand or aggregate supply, although both need to be changed simultaneously.
c
You might also like to view...
Sarah is considering lending an amount of $45,000 to her friend who promises to return $60,000 after the end of ten years
What is the net present value of Sarah's investment? Is it worthwhile to undertake this investment? Assume that the market rate of interest is 6%.
Why do economists generally favor vouchers to achieve an efficient outcome?
What will be an ideal response?