Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

At present, the economy is located at PY on the diagram. In the short run, what effect is government spending on education likely to have on unemployment and inflation?

  • Aunemployment: fall; inflation: fall
  • Bunemployment: fall; inflation: rise
  • Cunemployment: rise; inflation: fall
  • Dunemployment: rise; inflation: rise

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