Refer to the Following Figure When Answering
Figure $( \Delta \pi )$

question 61

Multiple Choice

Refer to the following figure when answering
Figure 12.9: Change in Inflation by Quarter (Source: Federal Reserve Economic Data, St. Louis Federal Reserve)
-Consider Figure 12.9, which shows the change in inflation $( \Delta \pi )$ from 1995 to 2000, by quarter. You are Federal Reserve chairman Greenspan and today's date is the second quarter of 1997 (1997.2) . Given the information you have, using the Phillips curve, to stabilize the economy you would ________ interest rates, risking ________.

• A) raise; recession
• B) raise; inflation
• C) lower; inflation
• D) lower; higher unemployment
• E) Not enough information is given.

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Definitions:

Eye Movement Desensitization

A therapeutic method, often used within the broader context of EMDR therapy, aimed at alleviating the distress associated with traumatic memories.

Reprocessing

A psychological technique aimed at helping individuals to re-examine and reinterpret past experiences from a new perspective.

Sense Of Identity

The awareness and understanding of oneself as a separate and distinct individual, including one's traits, beliefs, and personality.

Intellectual Functioning

A measure of a person's cognitive abilities, including reasoning, problem-solving, planning, abstract thinking, comprehension, learning, and judgment.