Suppose the Federal Reserve Makes Monetary Policy More Expansionary

question 142

Multiple Choice

Suppose the Federal Reserve makes monetary policy more expansionary.In the long run

• A)both inflation and the unemployment rate are higher than they were prior to the change in policy.
• B)inflation is higher and the unemployment rate is the same as it was prior to the change in policy.
• C)inflation is lower and the unemployment rate is lower than it was prior to the change in policy.
• D)inflation is lower and unemployment is the same as it was prior to the change in policy.

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Definitions:

Equity Method

An accounting technique used to assess the profits earned by investments in other companies, where the investment's value is adjusted to reflect the investor’s share of the investee’s net assets.

Journal Entries

are records of financial transactions in the accounting system, ensuring that the debit and credit balances are equal.

Contractual Agreement

A legally binding contract that outlines the terms and conditions between two or more parties, specifying obligations, rights, and duties.

Proportionate Rights

The entitlements of shareholders to maintain their fractional ownership of a company by buying a proportionate number of new shares during issuance.