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:

Detection

The act or process of discovering or identifying the presence of something concealed or unknown.

Perception

The method through which people arrange and understand their sensory experiences to assign significance to the world around them.

Sensation

The method through which our sensory receptors and nervous system detect and interpret energies stemming from environmental stimuli.

Grapheme-Colour Synesthesia

A condition where an individual's perception of numbers and letters is associated with the experience of colors.