If the Actual Inflation Rate Exceeds the Expected Inflation Rate,then

question 67

Multiple Choice

If the actual inflation rate exceeds the expected inflation rate,then:

• A)the economy is operating along the long-run Phillips curve.
• B)unemployment exceeds the natural rate.
• C)maintaining the existing unemployment rate will require increasing inflation in the long run.
• D)the actual rate will tend to fall toward the expected rate.
• E)unemployment will tend to decrease in the long run.

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Definitions:

Predictive Validity

The degree to which a result from a measurement or evaluation forecasts upcoming abilities in a connected activity.

Test Validity

The degree of accuracy with which an assessment measures its intended target.

Normal Distribution

A bell-shaped frequency distribution curve where most occurrences take place in the middle of the range and the probabilities of values farther away from the mean taper off equally in both directions.

Predictive Validity

How well a score from a test or scale indicates anticipated performance in tasks or outcomes that are related.