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:

Pure Interest Yield

The portion of interest or return on an investment that represents the compensation for the time value of money, excluding any other types of returns or costs.

Investment Choices

decisions made by individuals or entities about where to allocate resources, including money or capital, to generate a return or achieve financial objectives.

Expectation Profit

The anticipated financial gain or potential that an investment or business venture may generate in the future, based on certain assumptions or forecasts.

Present Value

The today's value of future money or cash flows, determined by applying a chosen rate of return.