Multiple Choice
If policy makers choose to use a contractionary fiscal policy as a response to the recession caused by a negative supply shock, _____.
A) both aggregate output and inflation will increase
B) both aggregate output and unemployment level will increase
C) aggregate output will and unemployment will increase
D) aggregate output will increase and unemployment will decrease
E) both unemployment and prices will decrease
Correct Answer:

Verified
Correct Answer:
Verified
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