Suppose the Output Gap Is Zero,and Policy Makers Wish to Reduce

question 57

Multiple Choice

Suppose the output gap is zero,and policy makers wish to reduce the inflation rate from 10 percent to 5 percent.Which of these policies seems best?

• A)contractionary policies to reduce output at least 5 percent below potential output
• B)a convincing declaration of the inflation rate target,so that expected inflation falls to 5 percent
• C)no policy action;inflation will fall on its own,eventually
• D)no policy action;inflation will converge to its long-run rate,regardless of policy
• E)price and wage controls to counteract their stickiness

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Definitions:

Surveillance System

A systematic approach or technology used for the ongoing collection, analysis, interpretation, and dissemination of data regarding a health-related event for use in public health action.

Tanner Staging

A system that assesses the physical development in children, adolescents, and adults based on external primary and secondary sex characteristics.

Sexual Development

A complex biological, physiological, and emotional process that starts in human infancy and continues into late adulthood, encompassing physical and psychological changes.

Diagnostic Tool

An instrument or technique used to identify the nature or cause of a condition, disease, or injury.