Answer to Question #338165 in Macroeconomics for Yaya

Question

Contractionary demand management policies tend to …

a. 

increase both inflation and the level of unemployment.

a. increase both inflation and the level of unemployment.

b. 

decrease the real GDP and the price level.

b. decrease the real GDP and the price level.

c. 

decrease real GDP and increase the price level.

c. decrease real GDP and increase the price level.

d. 

increase the price level and decrease real output.

Answer 1

a. increase both inflation and the level of unemployment.