Suppose most economists agree that the target rate of unemployment is between 4 and 7 percent. If the actual unemployment rate is 11 percent, then most economists would agree that:
A)both expansionary and contractionary policies are appropriate.
B)expansionary monetary and fiscal policies are appropriate.
C)contractionary monetary and fiscal policies are appropriate.
D)neither expansionary nor contractionary policies are appropriate.

Question

Quizplus · Accepted Answer

When the actual unemployment rate is significantly higher than the target rate (11% vs. 4-7%), expansionary monetary and fiscal policies are appropriate to stimulate economic growth and reduce unemployment.

Suppose Most Economists Agree That the Target Rate of Unemployment