An Inflation _____ May Be More Likely to Stabilize Output

question 28

Multiple Choice

An inflation _____ may be more likely to stabilize output as well as inflation because they have established credibility and _____.

• A)dove; lowered the core rate of inflation
• B)hawk; reduced inside lags
• C)dove: anchored inflationary expectations
• D)hawk; anchored inflationary expectations

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Definitions:

Aggregate Output

The total quantity of goods and services produced in an economy in a given period.

Transfer Payment

A payment made by the government to individuals, without the government receiving any goods or services in return.

Shareholders

Individuals or entities that own shares in a corporation, giving them a claim on part of the corporation's assets and profits.

Inventories

Stocks of goods and materials a business holds for the purpose of resale or production.