What would a central bank need to do to reverse the effects of a favorable supply shock on inflation? What would its reaction do to the unemployment rate in the short run?


It would increase the money supply growth rate. The unemployment rate would fall further below its natural rate.

Economics

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The most direct way in which money eliminates the need for a double coincidence of wants is through its use as a

A) medium of exchange. B) standard of deferred payment. C) store of value. D) unit of account.

Economics

Refer to the above figure. Production at Point E

A. would indicate production at a level below that which is attainable. B. would demonstrate a total lack of technical expertise. C. would indicate that this economy is producing beyond its capabilities. D. is not attainable with given resources and technology.

Economics

The strength of the demand for a resource depends on the following factors, except:

A.  Supply of the resource B.  Productivity of the resource C.  Price of the product the resource helps to produce D.  Demand for the product the resource helps to produce

Economics

If the expected inflation rate is unchanged, a fall in the natural rate of unemployment would

A) shift the short-run Phillips curve to the right. B) not shift the short-run Phillips curve. C) shift the short-run Phillips curve to the left. D) shift the short-run Phillips curve to the left and shift the long-run Phillips curve to the right.

Economics