When the economy is overheating and policymakers pursue contractionary fiscal policy,they express willingness to trade off _________ output for a ________ price level.

Question

Quizplus · Accepted Answer

When the economy is overheating, policymakers pursue contractionary fiscal policy to reduce aggregate demand. This will lead to lower output and a lower price level.

When the Economy Is Overheating and Policymakers Pursue Contractionary Fiscal