Expansionary Monetary Policy to Prevent Real GDP from Falling Below

question 158

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

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Definitions:

Necrosis

A form of cell injury which results in the premature death of cells in living tissue by autolysis.

Dissolution

The closing down or dismissal of an assembly, partnership, or official body, often referring to the legal termination of an organization’s existence.

Isomorphism

The process through which organizations in the same sector or field become increasingly similar in their structures, processes, and practices, often in response to regulatory, competitive, or cultural pressures.

Mimetic Isomorphism

A process by which organizations emulate others in their field or industry, often in response to uncertainty or to gain legitimacy.