The traditional Phillips Curve suggests that,if government uses an expansionary fiscal policy to stimulate output and employment:
A) unemployment may actually increase because of the crowding-out effect.
B) tax revenues may increase even though tax rates have been reduced.
C) deflation may result.
D) the natural rate of unemployment may fall.

Question

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The Answer of The traditional Phillips Curve suggests that,if government uses an expansionary fiscal policy to stimulate output and employment:
A) unemployment may actually increase because of the crowding-out effect.
B) tax revenues may increase even though tax rates have been reduced.
C) deflation may result.
D) the natural rate of unemployment may fall.

The Traditional Phillips Curve Suggests That,if Government Uses an Expansionary