If the Current Unemployment Rate Is 5%,under Which of the Following

question 84

Multiple Choice

If the current unemployment rate is 5%,under which of the following circumstances would you expect the Fed to use contractionary monetary policy?

• A)if the natural rate of unemployment is below 5%
• B)if the natural rate of unemployment is above 5%
• C)if the inflation rate is above 5%
• D)if the inflation rate is below 5%

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Definitions:

Fixed Cost

Costs that do not vary with the level of production or sales, remaining constant regardless of business activities.

High-Low Method

A technique used in cost accounting to estimate variable and fixed costs by analyzing the highest and lowest levels of activity and their associated costs.

Variable Cost

Variable costs are expenses that vary directly with the level of production or sales volume, such as raw materials and packaging.

Fixed Cost

Expenses that do not change in proportion to the level of goods or services produced by a business.