If the Economy Is in a Long-Run Equilibrium When the Federal

question 52

Multiple Choice

If the economy is in a long-run equilibrium when the Federal Reserve decides that its inflation target is too low and chooses to raise it,________.

• A)monetary policy would ultimately lead to higher potential output but real interest rates and inflation would be unaffected in the long run
• B)monetary policy would ultimately lead to higher inflation but real interest rates and potential output would be unaffected in the long run
• C)monetary policy would ultimately lead to higher interest rates but potential output and inflation would be unaffected in the long run
• D)monetary policy would ultimately lead to higher interest rates,potential output,and inflation in the long run
• E)none of the above

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Definitions:

Integers

Whole numbers that can be positive, negative, or zero, but not fractions or decimals.

Decimal Numbers

Numbers expressed in the base-10 numeral system, including integers, fractions, and real numbers notated with a decimal point.

New Operator

In many programming languages, this operator is used to create new instances of objects by allocating memory for them.

Int Variable

A variable in programming that stores an integer, which is a number without a fractional component, used for counting or indexing.