Assume an economy is suffering from stagflation. Suppose the government and the central bank are only interested in combatting inflation. A. Using counter-cyclical fiscal policy could involve Answer 1 Question 8 government spending and Answer 2 Question 8 taxes. B. The central bank would use Answer 3 Question 8 monetary policy which results in Answer 4 Question 8 in the money supply pushing Answer 5 Question 8 interest rates leading to Answer 6 Question 8 in investment. C. Both A and B would result in Answer 7 Question 8 in Answer 8 Question 8 which is shown as a Answer 9 Question 8 shift. D. The net result could be Answer 10 Question 8 in the unemployment rate and Answer 11 Question 8 in the relative price level