Question
Why will it be difficult for the Russian government to decrease both inflation AND unemployment at the same time? Choose the main idea, and the correct monetary AND fiscal policy examples. Choose the three correct answers.
• the government will struggle because the tools needed to do both contradict one another
• the government will struggle because it is impossible to achieve either of these goals
• contractionary monetary policy to increase interest rates to slow consumer spending and lower inflation
• expansionary fiscal policy to decrease interest rates to speed up consumer spending
• contractionary monetary policy to decrease taxes and increase consumer spending
• expansionary fiscal policy to decrease taxes and increase consumer spending to increase output and lower unemployment
• the government will struggle because the tools needed to do both contradict one another
• the government will struggle because it is impossible to achieve either of these goals
• contractionary monetary policy to increase interest rates to slow consumer spending and lower inflation
• expansionary fiscal policy to decrease interest rates to speed up consumer spending
• contractionary monetary policy to decrease taxes and increase consumer spending
• expansionary fiscal policy to decrease taxes and increase consumer spending to increase output and lower unemployment
Answers
GPT-4o mini
The main idea is: **the government will struggle because the tools needed to do both contradict one another.**
The correct monetary and fiscal policy examples are:
1. **Contractionary monetary policy to increase interest rates to slow consumer spending and lower inflation.**
2. **Expansionary fiscal policy to decrease taxes and increase consumer spending to increase output and lower unemployment.**
3. **Expansionary fiscal policy to decrease taxes and increase consumer spending.**
These policies illustrate the conflicting nature of measures aimed at controlling inflation (often contractionary) versus those aimed at reducing unemployment (often expansionary).
The correct monetary and fiscal policy examples are:
1. **Contractionary monetary policy to increase interest rates to slow consumer spending and lower inflation.**
2. **Expansionary fiscal policy to decrease taxes and increase consumer spending to increase output and lower unemployment.**
3. **Expansionary fiscal policy to decrease taxes and increase consumer spending.**
These policies illustrate the conflicting nature of measures aimed at controlling inflation (often contractionary) versus those aimed at reducing unemployment (often expansionary).