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The Structure of the Short-Run Model Is Best Described as Which

Question 5

Multiple Choice

The structure of the short-run model is best described as which of the following?


A) Nominal interest rate \rightarrow Real interest rate \rightarrow Short-run output \rightarrow Change in inflation
B) Nominal interest rate \rightarrow Real interest rate \rightarrow Change in inflation
C) Nominal interest rate \rightarrow Short-run output \rightarrow Change in inflation
D) Real interest rate \rightarrow Short-run output \rightarrow Change in inflation \rightarrow Nominal interest rate
E) Short-run output \rightarrow Change in inflation \rightarrow Real interest rate \rightarrow Nominal interest rate

Correct Answer:

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