The government increase government spending to try to reduce unemployment This is an example of ?
Correct answer: C. fine tuning
- A. laissez-faire.
- B. monetary policy
- C. fine tuning
- D. automatic stablisers
Explanation
Increasing government spending deliberately to reduce unemployment is discretionary fiscal policy, commonly called fine-tuning. Automatic stabilisers operate without a new government decision, while monetary policy concerns money supply and interest rates.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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