If the Fed Reduces Inflation 1 Percentage Point and This

question 169

Multiple Choice

If the Fed reduces inflation 1 percentage point and this makes output fall 5 percentage points and unemployment rises 2 percentage points for one year, the sacrifice ratio is

• A)1/5.
• B)2.
• C)5/2.
• D)5.

---

Definitions:

Industrial/Organizational Psychologist

Professionals who apply psychological principles to workplace environment, organization, and personnel issues.

Counseling Psychologist

A professional who helps people with physical, emotional, and mental health issues improve their sense of well‑being, alleviate distress, and resolve crises.

Clinical Psychologist

A professional specializing in diagnosing, evaluating, and treating mental, emotional, and behavioral disorders through psychological testing, counseling, and therapy.

Developmental Psychologist

A professional who studies the growth and development of the human mind and behavior throughout life.