Consider an Economy Without Any Supply Shocks

question 57

Multiple Choice

Consider an economy without any supply shocks. If the expected inflation rate is 3 percent and the actual inflation rate is also 3 percent, then

• A)the economy cannot be in a short- run equilibrium.
• B)real GDP must be more than potential GDP.
• C)real GDP must be less than potential GDP.
• D)real GDP must be equal to potential GDP.
• E)we can deduce nothing about the level of GDP.

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Definitions:

Texture Gradients

A depth cue in which the density and detail of texture change with distance, helping the observer to perceive spatial relationships.

Depth Cue

Are visual or auditory indications that provide information on the relative distance of objects from an observer, aiding in perception of depth.

Interposition

A visual signal that an object is closer than the ones behind it because it obstructs their view.

Half-Moon Contours

Shapes or outlines that resemble the crescent form of the moon at either its first or last quarter phase.