If people come to expect ongoing inflation, what will happen over time independent of the Fed's response?
a. The long-run aggregate supply curve will shift to the right.
b. The aggregate supply curve will continue to shift upward.
c. The aggregate demand curve will continue to shift to the right.
d. The aggregate supply curve will continue to shift downward.
e. The aggregate demand curve will continue to shift to the left.
B
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The Cambridge k is all of the following except
A) the reciprocal of the income velocity of money. B) a transactions demand for money. C) the fraction of GDP that people wish to hold in the form of money balances. D) the velocity of money.
How does a bond sale by the Fed affect the money supply?
(A) The sale increases the money supply but not in the proportion that the multiplier effect would suggest. (B) The sale increases the money supply. (C) It does not affect the money supply. (D) The sale decreases the money supply.
In the case of a linear demand curve, demand becomes more price elastic as price increases
Indicate whether the statement is true or false
It is difficult in economics to perform controlled experiments.
Answer the following statement true (T) or false (F)