The Difference in Outcomes Occurring with a Credible Nominal Anchor

question 57

Multiple Choice

The difference in outcomes occurring with a credible nominal anchor and without one, given a positive aggregate demand shock is that ________.

• A) with the credible policy there is no shift in the aggregate supply curve
• B) there is no difference but credibility provides national security
• C) without credible policy, inflation will continue to spiral upwards
• D) with credible policy, the aggregate supply curve shifts back quickly

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Definitions:

Demand Visibility

The ability of a company to forecast and respond to customer demand in a timely and accurate manner.

Buyback

A commercial agreement where a seller agrees to purchase previously sold products back from the buyer, often used in supply chain contracts to manage excess inventory or product returns.

Returns Contract

An agreement that delineates the policy and process for returning goods, including conditions and timeframes.

Supplier Price

The cost at which businesses purchase goods or services from vendors.