Suppose We Are Initially at a Long-Run SP/LP Equilibrium with X

question 37

Multiple Choice

Suppose we are initially at a long-run SP/LP equilibrium with x = p = pe = 4.Then an adverse supply shock adds 3 percentage points to the inflation necessary to produce each level of output.A "neutral" policy response ________ the level of nominal GDP growth so that inflation is ________ percent while (Y/YN) ________.

• A)lowers,4,falls
• B)lowers,between 4 and 7,remains at 100
• C)holds constant,between 4 and 7,falls
• D)raises,4,remains at 100
• E)raises,7,remains at 100

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Definitions:

Hippocampus

A region of the brain that is associated with the formation of memories and navigation.

Heritable Risk Factor

Any attribute, characteristic, or exposure that increases the likelihood of developing a disease or injury, which can be passed from parent to offspring through genes.

Medial Prefrontal Cortex

A part of the frontal lobe of the brain involved in decision-making, social behavior, and personality expression.

Operant Conditioning

Form of learning in which behaviors lead to consequences that either reinforce or punish the organism, leading to an increased or a decreased probability of a future response.