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:

Mass

A measure of the amount of matter contained in an object, commonly measured in kilograms or grams.

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A portion of matter in the liquid state used for analysis or testing.

Mass

An assessment of the quantity of substance contained within an object, usually expressed in kilograms or grams.

Chemical

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