Suppose Expected Inflation and Actual Inflation Are Both Relatively High,and

question 75

Multiple Choice

Suppose expected inflation and actual inflation are both relatively high,and unemployment is at its natural rate.If the Fed then pursues a contractionary monetary policy,which of the following results would be expected in the short run?

• A)Expected inflation would exceed actual inflation,and unemployment would exceed its natural rate.
• B)Expected inflation would exceed actual inflation,and unemployment would be below its natural rate.
• C)Actual inflation would exceed expected inflation,and unemployment would exceed its natural rate.
• D)Actual inflation would exceed expected inflation,and unemployment would be below its natural rate.

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Definitions:

Brainstorming

A collaborative idea-generating activity aimed at finding a conclusion for a specific problem by gathering a list of ideas spontaneously contributed by its members.

Nominal Group Technique

Nominal Group Technique is a structured method for group brainstorming that encourages contributions from all participants, often used in decision-making.

PDCA

"Plan-Do-Check-Act," a four-step management method used in business for the control and continuous improvement of processes and products.

Cyclical Process

A process that repeats in a series of cycles, where the end of one cycle is the beginning of the next, common in natural and economic systems.