Suppose the U

question 88

Multiple Choice

Suppose the U.S. economy is operating at potential output. A negative supply shock that is accommodated by an open market purchase by the Federal Reserve will cause ________ in real GDP in the long run and ________ in inflation in the long run,everything else held constant.

• A)no change;an increase
• B)no change;a decrease
• C)an increase;an increase
• D)a decrease;a decrease

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Definitions:

Clothed

The state of being dressed or wearing garments.

Fed

A term colloquially used to refer to the Federal Reserve System, the central banking system of the United States.

Community College

A type of educational institution that provides higher education and lower-level tertiary education, granting certificates, diplomas, and associate degrees.

School Access

The extent to which individuals have the opportunity to attend educational institutions, including considerations of physical, financial, and legal barriers.