If there is an adverse supply shock and the Federal Reserve responds by increasing the growth rate of the money supply, then in the short run the Federal Reserve's action
a. lowers both inflation and unemployment.
b. lowers inflation but raises unemployment.
c. raises inflation but lowers unemployment.
d. raises both inflation and unemployment.
c
You might also like to view...
Which statement is true?
A. On the production possibilities frontier, 85 percent of capital is employed. B. If we moved closer to the origin and further away from the production possibilities frontier, unemployment would increase. C. To have economic growth, we must push the production possibilities frontier outward. D. All of the statements are true.
If a scale economy is the dominant technological factor defining or establishing comparative advantage, then the underlying facts explaining why a particular country dominates world markets in some product may be pure chance, or historical accident
Explain, and compare this with the answer you would give for the Heckscher-Ohlin model of comparative advantage.
In the above figure, assuming Firm 1 and Firm 2 are the sole producers in the industry, the industry quantity supplied at price P1 is equal to
A) Q1 + Q2. B) Q1 + Q3. C) Q2 + Q4. D) Q4 - Q2.
If we say that demand has increased, we mean that there has been
a. a leftward movement along the demand curve b. a rightward movement along the demand curve c. a leftward shift of the demand curve d. a rightward shift of the demand curve e. an increase in the slope of the demand curve