If the Fed Makes a Credible Announcement That Its Policy

question 25

Multiple Choice

If the Fed makes a credible announcement that its policy aims to reduce inflation, the

• A) long-run Phillips curve shifts downward.
• B) short-run Phillips curve shifts downward.
• C) long-run Phillips curve shifts upward.
• D) short-run Phillips curve shifts upward.
• E) long-run Phillips curve shifts rightward.

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Definitions:

Natural Resources

Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain or ecological functions.

Biotic Potential

The maximum reproductive capacity of an organism under optimum environmental conditions.

Environmental Resistance

The sum of environmental factors that tend to restrict the biotic potential of an organism or population, affecting its growth and survival.

Carrying Capacity

The maximum population size of a biological species that can be sustained by a specific environment, given the food, habitat, water, and other necessities available in the environment.