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

question 29

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) A and B only

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Definitions:

Invention Hazards

The potential risks or unintended negative consequences associated with the creation and implementation of new inventions or technologies.

Normal Accidents

Refers to complex systems' inevitable incidents caused by their intricacies and interactive elements, often unpredictable.

Invention Speculation

The act of predicting or theorizing about future inventions and technological advancements without concrete evidence.

Technological Determinist

A perspective suggesting that technological development shapes societal change, including cultural and social structures.