Efforts to reduce the unemployment rate are likely, in the short run, to lead to
A)a decrease in the inflation rate.
B)an increase in the inflation rate.
C)no change in the inflation rate.
D)have no impact on unemployment.

Question

Quizplus · Accepted Answer

Efforts to reduce the unemployment rate, such as increasing government spending or lowering interest rates, can lead to an increase in the demand for goods and services. This increased demand can lead to a rise in prices and, therefore, inflation.

Efforts to Reduce the Unemployment Rate Are Likely, in the Short