In 1980,the Inflation Rate Reached About 14 Percent

question 51

Multiple Choice

In 1980,the inflation rate reached about 14 percent.The Federal Reserve __________ interest rates,sending the economy into a(n) __________.When doing so,the Federal Reserve knew this would be the case because of the __________.

• A)raised;expansion;Phillips curve
• B)raised;recession;Phillips curve
• C)raised;recession;Okun relationship
• D)decreased;recession;Phillips curve
• E)decreased;expansion;Phillips curve

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Definitions:

Required Rate

typically refers to the minimum expected rate of return on an investment, necessary for it to be considered a viable option.

Required Rate

The minimum anticipated return an investor expects to achieve on an investment.

Annual Cash Flows

The net amount of cash and cash equivalents being transferred into and out of a business over a year, reflecting its operational efficiency and financial health.

Crossover Point

The point at which two or more alternative investments achieve the same cumulative cash flow or rate of return.