An adverse supply shock causes output to
a. rise. To counter this a central bank would increase the money supply.
b. rise. To counter this a central bank would decrease the money supply.
c. fall. To counter this a central bank would increase the money supply.
d. fall. To counter this a central bank would decrease the money supply.
c
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In a market with barriers to entry:
A. the implications of Adam Smith's theory of the invisible hand can be expected to hold. B. prices will direct productive resources toward underserved markets. C. economic profit will not fall to zero in the long run. D. firms will earn zero economic profit in the long run.
Which of the following is a negative real shock that occurred during the Great Depression
What will be an ideal response?
An effect of the inflation tax is that it redistributes income from the:
A. government to the borrowers of fixed-interest-rate debt. B. borrowers of fixed-interest-rate debt to the government. C. lenders of fixed-interest-rate debt to the borrowers of this debt. D. borrowers of fixed-interest-rate debt to the lenders of this debt.
An economic ________ refers to either an upturn or a downturn in the economy.
A. stagnation B. model C. fluctuation D. chain index