Figure 35-8 Use This Graph to Answer the Questions Below

question 21

Multiple Choice

Figure 35-8
Use this graph to answer the questions below.
-Refer to figure 35-8.Suppose the economy starts at 5% unemployment and 3% inflation.If the Federal Reserve pursues an expansionary monetary policy,in the short run the economy moves to

• A)3% unemployment and 5% inflation.In the long run the economy moves to 5% unemployment and 5% inflation.
• B)3% unemployment and 5% inflation.In the long run the economy moves to 3% unemployment and 5% inflation.
• C)7% unemployment and 3% inflation.In the long run the economy moves to 5% unemployment and 5% inflation.
• D)7% unemployment and 3% inflation.In the long run the economy moves to 5% unemployment and 3% inflation.

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Definitions:

Foresight

The ability to predict or plan for future events with thoughtful consideration of possible developments and scenarios.

Job Simplification

The process of reducing the complexity of a job by limiting the number of tasks or operations involved, often with the aim of improving efficiency and productivity.

Work Standards

Established expectations and requirements for performance and behavior in the workplace, guiding how tasks should be performed.

Incentive Wage Plans

Compensation schemes designed to motivate employees by linking pay directly to performance or productivity levels.