Suppose Real and Potential GDP Are Initially Equal

question 48

Multiple Choice

Suppose real and potential GDP are initially equal. If the Fed increases the target inflation rate, then in the short run we would expect

• A)a decrease in the rate of inflation.
• B)an increase in the rate of inflation.
• C)a higher real rate of interest.
• D)lower unemployment.
• E)a higher nominal interest rate.

---

Definitions:

Neuropsychological Assessment

The evaluation of brain functions through tests that measure cognitive, motor, behavioral, and linguistic skills, often used to diagnose neurological conditions.

Mental Ability

The capacity to perform cognitive tasks and solve problems, often evaluated through IQ tests and other assessments.

Vocations

Occupations or professions, especially ones for which individuals are trained or feel a strong calling.

Learning Disabilities

Neurologically-based processing problems that interfere with learning basic skills and/or processing information.