If the Economy Is at Potential Output and the Fed

question 152

Multiple Choice

If the economy is at potential output and the Fed increases the money supply, in the LONG run real GDP will likely:

• A)fluctuate randomly.
• B)remain the same.
• C)decrease.
• D)increase.

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Definitions:

Defect

A flaw or imperfection in a product, process, or system that fails to meet specified criteria.

Proportion

A statistical measure that indicates the fraction of the total that possesses a certain attribute or characteristic.

Relative Risk

A measure in epidemiology that quantifies the risk of a certain event happening in one group compared to its occurrence in another group.

Defective

Pertaining to a product or item that fails to meet the quality or performance standards, often due to manufacturing errors or flaws.