Because There Is a Trade-Off Between Inflation and Unemployment in the Short

question 7

Multiple Choice

Because there is a trade-off between inflation and unemployment in the short run,

• A)lower unemployment will typically cause inflation to fall.
• B)policies designed to reduce unemployment will typically set off a recession.
• C)policies designed to reduce inflation will cause unemployment to fall as well.
• D)higher inflation will generally be associated with higher unemployment.
• E)lower inflation will generally be associated with higher unemployment.

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Definitions:

Tire

A rubber covering, typically inflated or surrounding an air-filled tube, placed around a wheel to form a flexible contact with the road.

Microchip(s)

Small semiconductor devices that contain integrated circuits used in electronic devices for processing, memory, or specific control functions.

Comparative Advantage

The capability of a person or group to perform a specific economic task with greater efficiency than another.

Microchips

Small electronic components that contain the computing and logic functions of a device or product.