Question

To fight inflation, the government may a. decrease aggregate demand, which will also lead to lower...

To fight inflation, the government may

a.

decrease aggregate demand, which will also lead to lower unemployment rates.
b.

decrease aggregate demand, which will also lead to higher unemployment rates.
c.

increase aggregate demand, which will also lead to lower unemployment rates.
d.

increase aggregate demand, which will also lead to higher unemployment rates.
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Answer #1

Solution:-Option B is correct.

B.decrease aggregate demand, which will also lead to higher unemployment rates.

Explanation:-To fight inflation, the government may decrease aggregate demand, which will also lead to higher unemployment rates why because In basic general meaning infaltion means the increased in price level.Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.

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