QuestionAugust 14, 2025

If government uses fiscal policy to restrain cost-push inflation, we can expect: A the unemployment rate to rise. B the unemployment rate to fall. C the aggregate demand curve to shift rightward. D tax-rate declines and increases in government spending.

If government uses fiscal policy to restrain cost-push inflation, we can expect: A the unemployment rate to rise. B the unemployment rate to fall. C the aggregate demand curve to shift rightward. D tax-rate declines and increases in government spending.
If government uses fiscal policy to restrain cost-push inflation, we can expect:
A the unemployment rate to rise.
B the unemployment rate to fall.
C the aggregate demand curve to shift rightward.
D tax-rate declines and increases in government spending.

Solution
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Answer

A the unemployment rate to rise. Explanation 1. Identify Fiscal Policy Impact Fiscal policy to restrain cost-push inflation typically involves reducing aggregate demand. 2. Analyze Effects on Unemployment Reducing aggregate demand can lead to decreased production, potentially increasing unemployment.

Explanation

1. Identify Fiscal Policy Impact<br /> Fiscal policy to restrain cost-push inflation typically involves reducing aggregate demand.<br /><br />2. Analyze Effects on Unemployment<br /> Reducing aggregate demand can lead to decreased production, potentially increasing unemployment.
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