Suppose Real and Potential GDP Are Initially Equal

question 59

Multiple Choice

Suppose real and potential GDP are initially equal. If the Fed increases the target inflation rate, then in the long run we would expect

• A)a higher real rate of interest.
• B)lower real interest rates.
• C)no change in the real rate of interest.
• D)a decline in unemployment.
• E)a decline in potential GDP.

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Definitions:

Value of Z

Often referred to in electrical engineering as impedance, representing the total opposition that a circuit offers to the flow of alternating current.

Voltage Drop

The reduction in voltage across a component or conductor due to resistance or impedance within the circuit.

RLC Series Circuit

A circuit consisting of a resistor (R), inductor (L), and capacitor (C) connected in series, affecting the impedance and phase of the circuit.

Power Factor

A measure of how effectively electrical power is converted into useful work output, expressed as the ratio of real power flowing to the load to the apparent power in the circuit.