Output Will Be Maintained at 1 Percent Above Its Potential

question 72

Multiple Choice

Output will be maintained at 1 percent above its potential for the next five years. Which of the following is a possible scenario of successive inflation rates over that period assuming no outside price shocks and an expectations- augmented Phillips curve?

• A) 1 percent, 2 percent, 3 percent, 5 percent, and 8 percent
• B) 10 percent, 11 percent, 13 percent, 12 percent, and 10 percent
• C) 15 percent for each of the next five years
• D) 8 percent, 7 percent, 5 percent, 3 percent, and 2 percent
• E) 9 percent, 7 percent, 4 percent, 10 percent, and 15 percent

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Definitions:

Flex

To bend a limb or muscle or the ability of muscles to contract and cause movement.

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A condition also known as "wry neck," characterized by a twisted or tilted neck due to shortened or spasmodic neck muscles.

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Sudden Infant Death Syndrome, an unexplained death, usually during sleep, of a seemingly healthy baby less than a year old.

Duchenne's

A genetic disorder characterized by progressive muscle degeneration and weakness due to the alterations of a protein called dystrophin that helps keep muscle cells intact.