A favorable supply shock causes the price level to
A) rise.To counter this a central bank could increase the money supply.
B) rise.To counter this a central bank could decrease the money supply.
C) fall.To counter this a central bank could increase the money supply.
D) fall.To counter this a central bank could decrease the money supply.
Correct Answer:
Verified
Q183: An adverse supply shock will shift short-run
Q184: Suppose that a small economy that produces
Q185: If there is an adverse supply shock
Q186: If people correctly anticipate that inflation will
Q187: If an increase in inflation permanently reduced
Q189: All else equal, country A has a
Q190: If the central bank keeps the money
Q191: A favorable supply shock will cause
A)unemployment to
Q192: Figure 35-5 Q193: Figure 35-5 ![]()
![]()
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents