A central bank might decide to "validate" a negative supply shock because
A) the economy might suffer a long slump before wages and prices fall enough to restore full employment.
B) there is no other way to return the economy to full employment.
C) there are no negative effects from this policy action.
D) central banks tend to pay little heed to inflation.
E) it is an effective means of preventing inflation.
Correct Answer:
Verified
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