The Structure of the Short-Run Model Is Best Described as Which

question 5

Multiple Choice

The structure of the short-run model is best described as which of the following?

• A) Nominal interest rate \(\rightarrow\) Real interest rate \(\rightarrow\) Short-run output \(\rightarrow\) Change in inflation
• B) Nominal interest rate \(\rightarrow\) Real interest rate \(\rightarrow\) Change in inflation
• C) Nominal interest rate \(\rightarrow\) Short-run output \(\rightarrow\) Change in inflation
• D) Real interest rate \(\rightarrow\) Short-run output \(\rightarrow\) Change in inflation \(\rightarrow\) Nominal interest rate
• E) Short-run output \(\rightarrow\) Change in inflation \[\rightarrow\] Real interest rate \[\rightarrow\] Nominal interest rate

---

Definitions:

Mortgage Loan

A loan secured by the collateral of specified real estate property, where the borrower is obliged to pay back with a predetermined set of payments.

Duty To Buy

An obligation, usually legal or contractual, to purchase a specific product or service.

Constructive Condition

Conditions inferred by law to enforce fairness in the performance of contractual obligations, even if not explicitly stated in the contract.

Breach Of Contract

A failure to perform any promise that forms all or part of a contract.