If the Economy Is at Potential Output and the Fed

question 64

Multiple Choice

If the economy is at potential output and the Fed increases the money supply, in the short run the price level will likely:

• A) fluctuate randomly.
• B) remain the same.
• C) decrease.
• D) increase.

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Definitions:

Monitoring

The process of systematically tracking performance or quality over time with the aim of making improvements.

Clarify Tasks

The process of making responsibilities, expectations, and tasks clear and understandable to ensure they are completed effectively.

Modify Policies

The process of updating or changing guidelines and rules to improve, adapt, or redefine organizational, institutional, or governmental operations.

Clarifying Behavior

Actions taken by individuals, often leaders, to make information, expectations, or objectives more understandable and transparent.