There Is an Inverse Relationship Between Real GDP and Inflation

question 46

Multiple Choice

There is an inverse relationship between real GDP and inflation because

• A)an increase in inflation leads to a higher interest rate, which leads to an increase in real GDP.
• B)an increase in inflation leads to a higher interest rate, which leads to a decrease in potential GDP that causes real GDP to decline.
• C)an increase in inflation leads to a higher interest rate, which leads to a decrease in real GDP.
• D)an increase in inflation leads to a lower interest rate, which leads to a decrease in real GDP.
• E)a decrease in inflation leads to a higher interest rate, which leads to a decrease in real GDP.

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Definitions:

Hypothalamic Functions

The roles performed by the hypothalamus, including regulation of temperature, hunger, thirst, sleep, and emotional activity.

Cell Nucleus

The membrane-bound organelle in eukaryotic cells that contains DNA, responsible for regulating gene expression and cell division.

Neuron

The fundamental unit of the nervous system, responsible for transmitting information through electrical and chemical signals.

Nervous System

The complex network of nerve cells and fibers that transmits nerve impulses between parts of the body, overseeing both voluntary actions and involuntary responses.