Suppose We Know the Following Information About a Hypothetical Economy

question 55

Multiple Choice

Suppose we know the following information about a hypothetical economy: - real GDP = $550 billion
- potential GDP = $500 billion
- inflation rate = 4%
If the central bank tries to keep real GDP constant at $550 billion,the inflation rate is likely to

• A)remain constant at 4%.
• B)fall below 4%.
• C)rise above 4%.
• D)cause stagflation.
• E)cause a recession.

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Definitions:

Hypocalcemia

A condition characterized by low levels of calcium in the blood, which can affect bone health and muscle function.

Calcium Gluconate

A mineral supplement and medication used to treat conditions caused by low blood calcium levels.

Central Nervous System

Comprises the brain and spinal cord, and is responsible for processing information and controlling the body's functions and activities.

Bronchopulmonary Dysplasia

A chronic lung disorder often affecting newborns, particularly those who were born prematurely, leading to difficulty breathing.