When the economy is hit by a negative demand shock and the central bank pursues policies to increase aggregate demand to its initial level,then
A) inflation will be lower.
B) output will be at its potential.
C) output will be lower.
D) inflation will be unchanged.
E) both B and D.
Correct Answer:
Verified
Q1: Activists of the policies believe that
A)the self-correcting
Q3: Nonactivists of the policies believe that
A)wages and
Q4: When the economy suffers a permanent negative
Q5: If aggregate output is below the natural
Q6: When the economy suffers a permanent negative
Q7: When the economy is hit by a
Q8: The disruption to financial markets starting in
Q9: When the economy suffers a temporary negative
Q10: Which of the following statements is CORRECT?
A)If
Q11: When the economy suffers a temporary negative
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