Suppose Policymakers Wish to Use Fiscal Policy to Fight Inflation

Multiple Choice

Suppose policymakers wish to use fiscal policy to fight inflation. Which statement is MOST accurate?

A) The government can have the best of both worlds in the form of low inflation and economic growth.
B) The way to lower the inflation rate is to decrease aggregate demand, which causes a rise in unemployment.
C) They should not use fiscal policy because in the long run, the economy will always go back to equilibrium.
D) Policymakers should use an expansionary policy because job creation is more important than inflation.