Suppose That There Is a Positive Aggregate Demand Shock and the Central

question 25

Multiple Choice

Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. If the commitment is credible,then

• A)the public's expected inflation will remain unchanged.
• B)the short-run aggregate supply curve will not shift.
• C)over time inflation will fall back down to the inflation target.
• D)all of the above.
• E)both A and B.

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Definitions:

Employment Patterns

Trends and tendencies in how people are employed, reflecting changes in workforce dynamics, career paths, and economic conditions.

Manager

A person responsible for controlling or administering an organization or group of staff, making decisions, and overseeing the execution of projects and tasks.

Links

Connections or relationships between different elements, people, or concepts that help in establishing communication or access.

Performance Efficiency

The measure of how well a task or activity is executed with minimal waste of resources.