In the Long Run People Come to Expect Whatever Inflation

question 12

True/False

In the long run people come to expect whatever inflation rate the Fed chooses to produce, so unemployment returns to its natural rate.

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Definitions:

Attainable

Something that can be achieved, reached, or accomplished with effort and resources available.

Production Possibilities Curve

A graph that shows the maximum number of goods or services that can be produced with limited resources.

Shift Inward

A decrease in the supply or demand of a product, represented by a leftward movement on a graph.

Physical Capital

Refers to the human-made resources used in the production of goods and services, such as machinery, buildings, and equipment.