Expansionary Monetary Policy to Prevent Real GDP from Falling Below

question 11

Multiple Choice

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

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

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Definitions:

Avoid-avoid

A decision-making dilemma involving choosing between two undesirable options.

Inner Conflict

An internal mental conflict arising from conflicting thoughts or desires.

Values Conflict

Conflict that occurs when one set of values clashes with another, and a decision has to be made.

Chronic Stress

A prolonged and constant feeling of stress that can negatively affect an individual's health over time.