Figure 35-8 Use This Graph to Answer the Questions Below

question 29

Multiple Choice

Figure 35-8
Use this graph to answer the questions below.
-Refer to figure 35-8.Suppose the economy starts at 5% unemployment and 3% inflation and expected inflation remains at 3%.Which one of the following points could the economy move to in the short run if the Federal Reserve pursues a more expansionary monetary policy?

• A)7% unemployment and 1% inflation
• B)7% unemployment and 3% inflation
• C)3% unemployment and 5% inflation
• D)3% unemployment and 7% inflation

Understand the application of compound interest in savings and retirement planning.

Understand the basic concept of present value and how to compute it for lump sums and annuities.

Distinguish between simple and compound interest and compute future values using both methods.

Analyze the differences and similarities among ordinary annuities, annuities due, and deferred annuities.

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