Suppose Expected Inflation and Actual Inflation Are Both Relatively High,and

question 75

Multiple Choice

Suppose expected inflation and actual inflation are both relatively high,and unemployment is at its natural rate.If the Fed then pursues a contractionary monetary policy,which of the following results would be expected in the short run?

• A)Expected inflation would exceed actual inflation,and unemployment would exceed its natural rate.
• B)Expected inflation would exceed actual inflation,and unemployment would be below its natural rate.
• C)Actual inflation would exceed expected inflation,and unemployment would exceed its natural rate.
• D)Actual inflation would exceed expected inflation,and unemployment would be below its natural rate.

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Definitions:

Photosynthesis

A process used by plants and other organisms to convert light energy, usually from the sun, into chemical energy that can be used to fuel the organism's activities.

Ecosystems

Complex communities of organisms and their physical environment interacting as an ecological unit in nature.

Food Chains

A hierarchy of organisms each dependent on the next as a source of food, illustrating the flow of energy and nutrients.

Chlorophyll

A pigment found in plants and algae that's critical for photosynthesis, allowing them to absorb light energy.