When Inflation and Unemployment Are Both Higher Than Desired, Most

Multiple Choice

When inflation and unemployment are both higher than desired, most economists believe that the government should:

A) adopt contractionary monetary policies that reduce both inflation and unemployment.
B) adopt expansionary fiscal policies that reduce both inflation and unemployment.
C) determine whether reducing inflation is more or less important than reducing unemployment and adopt a policy that targets the more important goal.
D) not act as it is impossible to reduce either inflation or unemployment under these circumstances.