Assume the following macroeconomic conditions in the United States and that US policy makers desire to achieve their three macro-policy goals defined in the usual way. A. Output has fallen below potential output, creating a large negative output gap. B. The employment rate has fallen, creating an unemployment rate of 8%. C. The inflation rate has risen to 10% per year. Which statement is CORRECT? Output is too low; the employment rate is too high; and the inflation rate is too high. Output is too high; the employment rate is too low; and the inflation rate is too low. Output is too high; the unemployment rate is too high; and inflation rate is too high. Output is too low; the unemployment rate is too low; and the inflation rate is too high. Output is too low; the unemployment rate is too high; and the inflation rate is too high.

Assume the following macroeconomic conditions in the United States and that US policy makers desire to achieve their three macro-policy goals defined in the usual way. A. Output has fallen below potential output, creating a large negative output gap. B. The employment rate has fallen, creating an unemployment rate of 8%. C. The inflation rate has risen to 10% per year. Which statement is CORRECT? Output is too low; the employment rate is too high; and the inflation rate is too high. Output is too high; the employment rate is too low; and the inflation rate is too low. Output is too high; the unemployment rate is too high; and inflation rate is too high. Output is too low; the unemployment rate is too low; and the inflation rate is too high. Output is too low; the unemployment rate is too high; and the inflation rate is too high.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Expectations Theory And The Economy

Section: Chapter Questions

Problem 7QP

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