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:

Down Payment

An initial payment made when something is bought on credit, representing a fraction of the full purchase price.

Scope of Authority

The range or limits of the powers and responsibilities legally granted to a person or organization.

Liable

Subject to being held accountable, usually in a legal or financial context, for fulfilling obligations or compensating for an incurred loss or damage.

Constructive Trust

A legal concept created by a court to rectify a situation where someone has wrongfully gained property at another's expense.