If the Fed Is Worried About Increasing Inflation and Decides

question 179

Multiple Choice

If the Fed is worried about increasing inflation and decides to raise the interest rate, real GDP will

• A)remain above potential GDP if consumption is more responsive to changes in interest rates than the Fed expected.
• B)come in below potential if potential GDP is higher than the Fed expected.
• C)come in above potential GDP if some other factor acts to shift the AD curve to the left.
• D)come in below potential if investment is less responsive to changes in interest rates than the Fed expected.
• E)quickly return to potential GDP as the AD curve shifts to the left.

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Definitions:

Cognitive Demands

Refers to the mental effort required to perform a task, including problem-solving, decision-making, and processing information.

Emotional Labour

Managing one's emotions and how they are expressed in order to satisfy the emotional needs of a specific job.

Formal Promotions

The advancement of an employee's rank or position in an organizational hierarchy in a structured and official manner.

Gen X

The generation born approximately between 1965 and 1980, known for its adaptability, technological adeptness, and value for work-life balance.