Question

When the economy is overheating and policymakers pursue contractionary fiscal policy, they express willingness to trade off _________ output for a ________ price level.a) higher;higher.
b) higher;lower.
c) lower;higher.
d) lower;lower.

Answer 1

Answer:

.a) higher;higher.

Explanation:

Economy overheating is an economic situation whereby the economy has a long time economic growth as well as activities, which as a result of this high level of inflation is recorded, then as the inflation linger the economy growth will be hindered and this can leads to recession in the country. It should be noted that When the economy is overheating and policymakers pursue contractionary fiscal policy, they express willingness to trade off higher output for a higher price level