During the U.S.Great Moderation,________.
A)the volatility in the inflation rate declined by 50%
B)the volatility in the rate of growth of real output declined by 33%
C)the economy stabilized from the higher uncertainty of the 1970s
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The Great Moderation was characterized by a decline in both inflation rate volatility (about 50% reduction) and real output growth rate volatility (about 33% reduction). This led to a more stable economy than in the 1970s when there was high uncertainty due to high inflation and oil prices, stagflation, and other factors. Therefore, option D is the best choice.