This Question 1 pt 1 of 14 3 complete In 2009 the Japanese e

This Question: 1 pt 1 of 14 (3 complete) In 2009, the Japanese economy was below full employment. A policy to restore full employment might O A. cut taxes and government expenditures, or increase the quantity of money OB. cut taxes, increase government expenditures, or decrease the quantity of money O C. raise taxes, decrease government expenditures, or decrease the quantity of money O D. raise taxes, incfease government expenditures, or increase the quantity of money O E. cut taxes, increase government expenditures, or increase the quantity of money This policy would create inflation if O A. the tax cut and expenditure increase brought a government budget deficit OB. the quantity of money was increased by more than taxes were cut O C. government expenditure is increased by more than the cut in taxes O D. the tax cut and expenditure increase increased the government budget deficit O E. the demand stimulation was so strong that it moved real GDP above potential GDP Click to select your answer. javascript:doExercise(1); box box 4 ... WO

Solution

Solution-

A policy to restore full employment might cut taxes, increase government expenditure, or increase in quantity of money.

The correct option is E. cut taxes, increase government expenditure, or increase in quantity of money.

Reason-

Japan could adopt various policies to restore full employment, Japan could reduce taxes, increase government expenditures, increase money and reduce interest rates.

This policy would create inflation if the quantity of money was increased by more than taxes were cut.

The correct option is B. the quantity of money was increased by more than taxes were cut.

Reason-

Japan could adopt various policies to restore full employment, Japan could reduce taxes, increase government expenditures, increase money and reduce interest rates.Increase the price level so that all of them will make a difference for a period of time. If the number of money is increased consistently, inflation will be sustained.