Page 130 - Macroeconomics. book docx_Neat

- Fiscal discipline

6. RELATIONSHIP BETWEEN MACROECONOMIC PROBLEMS

Macroeconomic problems are closely related. Inflation may increase unemployment,

recession may worsen budget deficits, and high public debt may limit economic growth.

Effective macroeconomic management requires integrated fiscal and monetary policies.

Review Questions

Multiple Choice Questions

1. Unemployment occurs when:

A. People refuse to work

B. People are unable to find jobs despite willingness to work

C. Prices increase

D. Government spending rises

2. Demand-pull inflation is caused by:

A. High costs

B. Excess demand

C. Technology

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