Policymakers Can Affect Inflation and Unemployment in the Short Term

question 13

Multiple Choice

Policymakers can affect inflation and unemployment in the short term by

• A)eliminating externalities.
• B)giving the central bank independence.
• C)changing the amount that the government spends.
• D)encouraging firms to think at the margin.

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Definitions:

Prolonged Inflammation

A chronic inflammation that persists over a long period, often resulting in tissue damage and contributing to various diseases.

Type 2 Diabetes

A chronic condition that affects the way the body processes blood sugar (glucose), characterized by high blood sugar, insulin resistance, and a lack of insulin.

Endogenous Opioid

Natural pain-relieving peptides produced by the body that act on the opioid receptors to reduce pain and induce pleasure.

Exogenous Opioid

Opioid substances introduced into the body from external sources, often for pain management or recreational use.