In Practice, It Is Difficult to Keep Inflation and Output

question 14

Multiple Choice

In practice, it is difficult to keep inflation and output from fluctuating when aggregate expenditures change because:

• A) it takes time for policymakers to recognize that shifts have occurred.
• B) changes in interest rates do not have an immediate impact on the economy.
• C) changes in consumer or business confidence can be very difficult to recognize as they are occurring.
• D) all of the answers given are correct.

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Definitions:

Proportion

A portion, segment, or fraction when evaluated in relation to its entirety.

Chi-squared Curve

Describes the distribution of a chi-squared statistic, used in hypothesis testing to determine how well observed data fit with expected data.

Degrees of Freedom

The number of independent values or quantities that can vary in the analysis without violating any constraints.

F Distribution

A probability distribution used in statistics to compare variances among samples, often employed in the analysis of variance (ANOVA).