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:

Estimate

An approximate calculation or judgment of a value, number, quantity, or extent of something.

Health Consciousness

An awareness and consideration for the health implications of one's habits and decisions, particularly in consumption and lifestyle.

Confidence Interval

A range of values used in statistics that is likely to contain the true value of an unknown parameter, calculated from a given set of sample data.

Sample Mean

The average of all measurements in a sample set, calculated by summing all observations and dividing by the number of observations.