Suppose Expected Inflation and Actual Inflation Are Both Relatively High,and

question 75

Multiple Choice

Suppose expected inflation and actual inflation are both relatively high,and unemployment is at its natural rate.If the Fed then pursues a contractionary monetary policy,which of the following results would be expected in the short run?

• A)Expected inflation would exceed actual inflation,and unemployment would exceed its natural rate.
• B)Expected inflation would exceed actual inflation,and unemployment would be below its natural rate.
• C)Actual inflation would exceed expected inflation,and unemployment would exceed its natural rate.
• D)Actual inflation would exceed expected inflation,and unemployment would be below its natural rate.

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Definitions:

Standard Deviation

A calculation that evaluates the scope of fluctuation or dispersal of values in a collection of data.

Amount Win

The total sum of money or points gained in a competition, lottery, or other form of game.

Probability Distribution

A mathematical function that provides the probabilities of occurrence of different possible outcomes for an experiment or event.

Standard Deviation

A statistical measurement that depicts how spread out the numbers in a data set are around the mean.