Multiple Choice
Related to the Economics in Practice on p. 558: An earthquake destroyed 50% of the Moldovian manufacturing base. The Moldovian government decided to use a contractionary fiscal policy to counter the effects of the earthquake on the economy. The use of the contractionary fiscal policy would have caused
A) the price level to be lower and the output level to be higher than they would have been without the policy action.
B) both the price level and the output level to be higher than they would have been without the policy action.
C) both the price level and output level to be lower than what they would have been without the policy action.
D) the price level to be higher and the output level to be lower than they would have been without the policy action.
Correct Answer:
Verified
Correct Answer:
Verified
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