"To Achieve the Nonperfectionist's Goal of High Enough Output to Give

question 117

Multiple Choice

"To achieve the nonperfectionist's goal of high enough output to give us no more than 3 percent unemployment,the price index might have to rise by as much as 4 or 5 percent per year." This statement made by two Nobel Prize-winning economists is

• A)false;if we were willing to accept annual inflation of 5 percent,an unemployment rate of less than 3 percent could be achieved.
• B)false;while a reduction in unemployment to 3 percent is attainable,it would require annual inflation of 8 percent to 10 percent to be sustained in the long run.
• C)false;the statement fails to recognize that inflation does not stimulate output and employment when it is widely anticipated.
• D)essentially true.

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Definitions:

Sampling Distribution

The probability distribution of a statistic based on a random sample.

Statistical Inferences

The process of drawing conclusions about population parameters based on a sample.

Probability

The likelihood or chance of an event occurring, expressed as a number between 0 and 1.

Parameter Data

Data or values that define or control the behavior of a mathematical function or system.