If the Fed Believes the Natural Rate of Unemployment Is

question 15

Multiple Choice

If the Fed believes the natural rate of unemployment is 5.5 percent and the natural rate is really 5 percent,what is likely to happen in the short run?

• A) The Fed will allow unemployment to be unnecessarily high and output to be unnecessarily low.
• B) The Fed will allow unemployment to be unnecessarily high,but output will remain at potential.
• C) The Fed will allow unemployment to be unnecessarily low and output to be unnecessarily high.
• D) The Fed will allow output to be unnecessarily low,but unemployment will remain at the natural rate.
• E) The Fed will allow unemployment to be unnecessarily low and output to be unnecessarily low.

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Definitions:

Extraversion

A personality trait characterized by orientation toward the external world and enjoyment of social interaction.

Dominant Attitude

The prevailing or most prominent mindset or perspective held by an individual or group, often influencing behavior and decision-making.

Personal Unconscious

In Jungian theory, it refers to all information that is present within an individual's mind, but not currently in conscious awareness.

Psyche

Jung’s term for personality.