If a Positive Aggregate Demand Shock Occurs and Monetary Policy

question 76

Multiple Choice

If a positive aggregate demand shock occurs and monetary policy is not credible then ________.

• A) inflation will increase
• B) the equilibrium interest rate will fall
• C) there will be a corresponding autonomous decrease in aggregate supply
• D) none of the above

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Definitions:

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The cognitive process that involves encoding, storing, and retrieving information from the past.

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Awareness and understanding of one's own thought processes, often referred to as "thinking about thinking."

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A method of regulation that guides activities toward achieving goals or standards.

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The study of how context influences the interpretation of meaning in language, including the use of language in social contexts and the understanding of indirect and implied meanings.