Governments may employ stimulus measures during high unemployment to boost activity, risking inflation. Conversely, they might enact contractionary measures during inflation to stabilize prices, potentially increasing unemployment.

The massive stimulus checks sent out by the U.S. government in 2020 in an attempt to fight off the economic effects of the pandemicMultiple Choicereduced disposable income but increased saving.decreased disposable income and saving.increased disposable income but reduced saving.generated a large increase in disposable income and saving.

When the economy is overheating and experiencing high inflation, contractionary fiscal policy aims to:  A. Increase government spending to boost aggregate demand  B. Reduce taxes to encourage consumer spending  C. Decrease government spending and increase taxes to reduce aggregate demand  D. Lower interest rates to encourage borrowing and investment

What effect does the payment of unemployment benefits have on the unemployment​ rate? On the severity of economic contractions or​ recessions? a. Receiving the unemployment benefits allows the unemployed workers to spend more time looking for a​ job, in​ turn, finding a job that fits their​ skillset, which leads to a lower unemployment rate.​ Also, unemployment benefits are a great cost to the government and increase the severity of contractions and recessions. b. Receiving the unemployment benefits allows the unemployed workers to spend more time looking for a​ job, in​ turn, raising the unemployment rate.​ However, unemployment benefits are a great cost to the government and increase the severity of contractions and recessions. c. Receiving the unemployment benefits allows the unemployed workers to spend more time looking for a​ job, in​ turn, raising the unemployment rate.​ Also, unemployment payments enable personal​ spending, increasing demand and reducing the severity of contractions and recessions. d. Receiving the unemployment benefits allows the unemployed workers to spend more time looking for a​ job, in​ turn, finding a job that fits their​ skillset, which leads to a lower unemployment rate.​ Also, unemployment payments enable personal​ spending, increasing demand and reducing the severity of contractions and recessions.

Suppose policy makers underestimate the natural rate of unemployment. In situations like these, policy makers will likely implement policies that result inSelect one:A.a higher inflation rate than necessary.B.an unemployment rate that is "too high."C.overly contractionary monetary and fiscal policy.D.a steadily decreasing inflation rate.E.more unemployment than necessary.

To address a rise in the unemployment rate, a government may:A.reduce the amount of money in circulation.B.raise interest rates to allow businesses to borrow less money.C.invest in programs that help people in need.D.lower interest rates to allow businesses to borrow less money.