Suppose the government wanted to address the problem of runaway inflation with discretionary fiscal policy. it would use some combination of group of answer choices
a. lower taxes and a higher discount rates
b. lower interest rates and lower spending
c. higher taxes and reduced bond sales
d. higher taxes and lower spending
answer: a. stagflation
explaining: stagflation was developed during the 1960s and 1970s. in economics, stagflation, a portmanteau of stagnation and inflation, is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. it raises a dilemma for economic policy, since actions designed to lower inflation may exacerbate unemployment, and vice versa. the term is generally attributed to iain macleod, a british conservative party politician who became chancellor of the exchequer in 1970; macleod coined the phrase in a speech to parliament in 1965.
(c ) improvements in worker health from better nutrition
robert fogel, an economic historian, and noble prize winner for economics, is best known for suggesting that a significant factor in long-run economic growth is improvements in worker's health from better nutrition, he was of the opinion that malnourished workers cannot perform manual labor, because they don't have the strength and stamina, and this will affect productivity. he believed that as nutrition improve, so will worker's productivity.