Starting from Full Employment at the Initial Target Inflation Rate

question 4

Multiple Choice

Starting from full employment at the initial target inflation rate, if there is an adverse inflation shock, then the Federal Reserve must _____ in order to keep inflation from becoming permanently higher.

• A)increase the target inflation rate.
• B)decrease the target inflation rate.
• C)maintain the initial target inflation rate.
• D)shift the short-run aggregate supply curve up.

---

Definitions:

Research Settings

The specific locations or environments in which scientific studies are conducted, including laboratories, field sites, and virtual spaces.

Pretest-Posttest

A research design where measurements are taken both before and after a treatment or intervention to assess its effects.

Nonequivalent Control

A research design where the control group is not randomly assigned, making it different in certain ways from the experimental group, which can affect the interpretation of results.

Control Time Series

A method in statistics and research that involves collecting data points from a single group or subject over a period of time to identify trends or effects of interventions.