Other things constant, which of the following would reduce unemployment and raise inflation?

A) The government lowers government spending.
B) Because of low growth abroad, net exports falls.
C) The government raises taxes.
D) Businesses become more optimistic about the future of the economy.

Unemployment

The situation where individuals who are willing and able to work are not currently employed.

Inflation

The magnitude of growth in the overall price points for goods and services, weakening the efficacy of spending power.

Government Spending

The total amount of money expended by a government on various sectors, including infrastructure, education, defense, and social services.