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  3. Study Set
    Principles of Macroeconomics Study Set 8
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    Exam 22: The Short Run Trade Off Between Inflation and Unemployment
  5. Question
    Suppose Policymakers Take Actions That Cause a Contraction of Aggregate
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Suppose Policymakers Take Actions That Cause a Contraction of Aggregate

Question 3

Question 3

Multiple Choice

Suppose policymakers take actions that cause a contraction of aggregate demand.Which of the following is a short-run consequence of this contraction?


A) The inflation rate decreases.
B) The level of output decreases.
C) The unemployment rate increases.
D) All of the above are correct.

Correct Answer:

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