If the Economy Is at Potential Output, and People's Expectations

question 43

Multiple Choice

If the economy is at potential output, and people's expectations about inflation is correct, then the actual inflation:

• A) equals expected inflation.
• B) is less than expected inflation.
• C) is greater than expected inflation.
• D) equals the natural rate of unemployment.

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Definitions:

After-School Program

Educational and recreational activities organized for children after the regular school day has ended, often aimed at furthering learning and social development.

Causation

The relationship between cause and effect where one event (the cause) is understood to be responsible for the occurrence of another event (the effect).

Correlation

A measure of the relationship between two variables or sets of data.

Hives

An allergic reaction that causes itchy, red welts on the skin, often triggered by medications, foods, stress, or other stimuli.