Suppose the Central Bank Is Using Monetary Policy in an Attempt

question 118

Multiple Choice

Suppose the central bank is using monetary policy in an attempt to hold real GDP permanently above potential GDP.With this policy decision,

• A)inflation can be kept at a low,constant rate.
• B)inflation is not a problem,but unemployment is.
• C)inflation will accelerate over time.
• D)the central bank will fail to achieve its goal.
• E)the AD curve will shift leftward to cure the inflation problem.

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Definitions:

Loyal Nine

A secret political organization formed in 1765 in Boston, aiming to fight against the imposition of British taxation and laws.

Quartering Act

A name given to a series of acts passed by the British Parliament in the 18th century, requiring local governments of the American colonies to provide housing and food for British soldiers.

Indentured Servants

Laborers bound under a contract to work for a specific person for a designated period in exchange for transportation, food, and accommodation.

Manufacturing

The process of producing goods in large quantities using machinery and labor, often within an industrial setting.