Altering Indexing Schemes to Control for Their Including 100 Percent

question 24

Multiple Choice

Altering indexing schemes to control for their including 100 percent of materials and other external price shocks could

• A) move the policy frontier in closer to the origin by reducing the momentum of those shocks throughout the economy.
• B) make positive shocks to aggregate demand far less troublesome in terms of the unemployment-inflation trade-off that they create.
• C) make negative shocks to aggregate demand far less troublesome in terms of the unemployment-overreaction trade-off that they create.
• D) make actual GDP less sensitive to fluctuation in potential GDP.
• E) increase the variance of unemployment around the natural rate during a demand-deficient recession.

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Definitions:

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Urine that is dark in color, which can be a sign of dehydration or may indicate liver or kidney issues.

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A major muscle in the neck that runs from the sternum and clavicle to the mastoid process of the temporal bone of the skull, aiding in head movement and rotation.