In Practice, It Is Difficult to Keep Inflation and Output

question 14

Multiple Choice

In practice, it is difficult to keep inflation and output from fluctuating when aggregate expenditures change because:

• A) it takes time for policymakers to recognize that shifts have occurred.
• B) changes in interest rates do not have an immediate impact on the economy.
• C) changes in consumer or business confidence can be very difficult to recognize as they are occurring.
• D) all of the answers given are correct.

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Definitions:

Cardiac

Pertaining to the heart and its functions or diseases.

Skeletal

Relating to the skeleton, the bony framework of the body that protects internal organs and supports the body structure.

Accomplishments

Achievements or successes that have been completed or attained, often through effort or skill.

Credibility

The quality of being trusted and believed in, often achieved by being consistently honest and reliable.