If the Fed Lowers the Inflation Rate and Initially Expected

question 93

Multiple Choice

If the Fed lowers the inflation rate and initially expected inflation does not change, in the short run the unemployment rate_{--------------------} and in the long run the unemployment rate_{--------------------} the natural unemployment rate.

• A)falls; is equal to
• B)does not change; is greater than
• C)does not change; is equal to
• D)rises; is greater than
• E)rises; is equal to

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Definitions:

Examples

Examples are specific instances or items that are representative of a general case or category, often used to illustrate a point or explain a concept.

Normally Distributed

A distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Standard Deviation

A measure of the dispersion or spread of a set of numbers, indicating how much the individual numbers differ from the mean of the set.

Mean

The average of a set of numbers, calculated by dividing the sum of the values by the count of numbers.