If the Natural Rate of Unemployment Is 6%,but the Fed

question 6

Multiple Choice

If the natural rate of unemployment is 6%,but the Fed thinks it is 5% and attempts to use monetary policy to move unemployment from 6% to 5%,then in the short run which of the following variables will the Fed's policy raise?

• A)the price level and real GDP
• B)the price level but not real GDP
• C)real GDP but not the price level
• D)neither real GDP nor the price level

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Definitions:

Paralinguistic Cues

Non-verbal elements of communication used to modify meaning or convey emotion, such as tone of voice, facial expressions, and gestures.

Pitch

The perception of the frequency of a sound, allowing us to distinguish between high and low sounds.

Tempo

The speed at which a piece of music is played or the pace of any activity.

Tonality

In music and speech, refers to the character or quality of sound, or in language, the distinction of meaning through pitch.