Assume That the Government Decides to Use Fiscal or Monetary

Multiple Choice

Assume that the government decides to use fiscal or monetary policy to stimulate the economy and that this action comes as a surprise to most individuals and businesses. In the short run, the result will be

A) a decrease in the average duration of unemployment and a decrease in the unemployment rate.
B) an increase in the average duration of unemployment and an increase in the unemployment rate.
C) a decrease in aggregated demand and a rise in the price level.
D) an increase in aggregate demand and a fall in the price level.