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If the Central Bank Responds to a Single Negative Supply

Question 84

Multiple Choice

If the central bank responds to a single negative supply shock with monetary validation, we can expect an increase in


A) costs but a decrease in real national income.
B) the money supply but a decrease in costs and prices.
C) the size of the output gap.
D) costs, the price level, and the money supply.
E) the price level and unemployment.

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