Suppose an Economy Exhibits a Large Unexpected Decrease in Productivity

question 77

Multiple Choice

Suppose an economy exhibits a large unexpected decrease in productivity growth that lasts for a decade.However,monetary policymakers are slow to recognize that the change is to potential,not current,output,and interpret the decrease in output as a recession that leads current to fall below potential output.In this scenario,policymakers believe that __________ pressures are building and incorrectly respond by __________ interest rates,sending the economy into a(n) ___________ gap.

• A)inflationary;raising;inflationary
• B)inflationary;reducing;inflationary
• C)inflationary;raising;recessionary
• D)recessionary;reducing;inflationary
• E)Not enough information is given.

---

Definitions:

Data Visualization

The graphical representation of information and data using visual elements like charts, graphs, and maps to make complex data more accessible and understandable.

Business Documents

Written records that are essential for the operation and management of a business, including emails, reports, contracts, and more.

Gantt Charts

A type of bar chart that illustrates a project schedule, showing the start and finish dates of elements within the project.

Radial Charts

A type of diagram where data is represented in a circular format, often used to display relationships or comparisons.