If People Eventually Adjust Their Inflation Expectations So That in the Long

question 36

Multiple Choice

If people eventually adjust their inflation expectations so that in the long run actual and expected inflation are the same,then policymakers

• A)can not exploit a tradeoff between inflation and unemployment in either the short or long run.
• B)can exploit a tradeoff between inflation and unemployment in the short run but not in the long run.
• C)can exploit a tradeoff between inflation and unemployment in both the short run and the long run.
• D)can exploit a tradeoff between inflation and unemployment in the long run,but not the short run.

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Definitions:

Par Value

The face value of a bond or the stock value stated in the corporate charter.

Convertible Preferred Stock

A type of preferred stock that gives holders the option to convert their shares into a specified number of common shares, usually after a predetermined date.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Par Value

Par value is a nominal value assigned to a security or stock, representing its minimum price as stated on the certificate or indicated in the charter.