Refer to the Following Figure When Answering the Following Questions

question 10

Multiple Choice

Refer to the following figure when answering the following questions.
Figure 12.9: Change in Inflation by Quarter
-Consider Figure 12.9. You are Federal Reserve chairman Greenspan and today's date is the fourth quarter of 1997 (1997.4) . Given the information you have, using the Phillips curve, to stabilize the economy you would ________ interest rates, risking ________.

• A) raise; inflation
• B) lower; inflation
• C) raise; recession
• D) lower; higher unemployment
• E) Not enough information is given.

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Definitions:

Bentham's Quantitative Model

A philosophical model proposed by Jeremy Bentham, emphasizing the calculation of pleasure and pain to determine the moral rightness of actions based on their utility.

Utility Principle

A principle in ethics and economics that suggests the best action is the one that maximizes utility, often defined as maximizing happiness and minimizing suffering.

Sadistic Dictator

A ruler who derives pleasure from inflicting suffering on others, often exercising power in a cruel or brutal manner.

Kant

A German philosopher who profoundly influenced modern philosophy with his works on epistemology, ethics, and aesthetics, known for his critique of pure reason.