Expansionary Monetary Policy to Prevent Real GDP from Falling Below

question 188

Multiple Choice

Expansionary monetary policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be relatively ________ and real GDP to be relatively ________.

• A)higher; higher
• B)higher; lower
• C)lower; higher
• D)lower; lower

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Definitions:

Contraction

The process of muscle fibers shortening and generating force, often resulting in movement of parts of the body.

Cardiac Muscle

A specialized form of striated muscle occurring in the hearts of vertebrates, responsible for its contraction.

Hypertrophy

The increase in size of an organ or tissue through the enlargement of its cells.

Skeletal Muscles

Muscles attached to bones by tendons that are responsible for the movement of the skeleton and thus the body.