Because the Natural Rate of Unemployment Is Not Known Precisely,policymakers

question 15

Multiple Choice

Because the natural rate of unemployment is not known precisely,policymakers who use it as a guide for policy must be

• A)less aggressive with policy changes than they would be if they knew the value of the natural rate.
• B)more aggressive with policy changes than they would be if they knew the value of the natural rate.
• C)ready to change policy more quickly.
• D)aware of other data.

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Definitions:

Inspiratory Reserve

The additional volume of air that can be inhaled after a typical inhalation.

Expiratory Reserve

The additional volume of air that can be forcibly exhaled after the completion of a normal, controlled exhalation.

Residual Volume

The amount of air left in the lungs after a person has exhaled completely.

Aging

The natural and inevitable process of growing older, characterized by gradual changes in the biological, psychological, and social structures of individuals.