Because reducing both unemployment and inflation simultaneously are conflicting goals:
A)there is a policy that will allow policymakers to achieve either objective.
B)aggregate demand policy will allow policymakers to achieve one of these objectives, but not both.
C)aggregate demand policy will allow policymakers to achieve both objectives, but only if it is expansionary.
D)aggregate demand policy will allow policymakers to achieve both objectives, but only if it is contractionary.

Question

Quizplus · Accepted Answer

Aggregate demand policy can target either inflation or unemployment, but addressing one often exacerbates the other. For example, policies aimed at reducing unemployment by increasing aggregate demand can lead to higher inflation, and vice versa.

Because Reducing Both Unemployment and Inflation Simultaneously Are Conflicting Goals