When There Is an Expansionary Gap, Inflation Will ________, in Response

question 52

Multiple Choice

When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.

• A)decline; raise; decline
• B)decline; lower; expand
• C)decline; lower; decline
• D)increase; raise; decline

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Definitions:

Ethical Reasoning

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles.

Programmed Decisions

Decisions that are routine and repetitive, made according to established guidelines or procedures.

Nonprogrammed Decisions

Decisions made in response to situations that are unique, are poorly defined and largely unstructured, requiring creative solutions.

Certainty

The state of being sure or confident about something, often with clear, predictable outcomes.