Question
If inflation accelerates due to the increase in the price of oil (an import), the best policy to combat such inflation in a country with
If inflation accelerates due to the increase in the price of oil (an import), the best policy to combat such inflation in a country with a high unemployment rate, would be to...
a.implement contractionary monetary policy, illustrated by the rightward shift of the AD curve.
b.respond with demand management policy that will increase aggregate demand, which will be illustrated by a rightward shift of the AD curve.
c.apply the supply-side policy that will increase aggregate supply, which will be illustrated by a rightward shift of the AS curve.
d.apply incomes policy, illustrated by a leftward shift of the AS curve.
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