An Argument That Links the Inflation of the Early 1970s

question 13

Multiple Choice

An argument that links the inflation of the early 1970s with excessive government spending on the Vietnam War and thus on excessive aggregate demand

• A) is consistent with the conclusions that could be drawn from a model with inflation and unemployment trade-offs.
• B) is not consistent with the conclusions that could be drawn from a model with trade-offs between inflation and unemployment and with GDP initially well below its potential.
• C) is consistent with the general foundations of a rational-expectations model.
• D) is consistent with the views that firms and consumers make the most of information available to them.
• E) all of the above.

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Sleep

A naturally recurring state of mind and body characterized by altered consciousness, relatively inhibited sensory activity, and inhibition of nearly all voluntary muscles.

Mood

A temporary state of feeling or emotion that impacts a person's perception of the world around them.

Excitatory Neurotransmitter

Chemical substances that transmit nerve signals across a synapse from one neuron to another, typically promoting an action potential.

Glutamate

A major neurotransmitter in the brain involved in learning, memory, and the regulation of the nervous system's excitatory signals.