If the Central Bank Responds to a Single Negative Supply

question 24

Multiple Choice

If the central bank responds to a single negative supply shock with monetary validation,we can expect an increase in

• A)the money supply but a decrease in costs and prices.
• B)costs but a decrease in real national income.
• C)the size of the output gap.
• D)costs,the price level,and the money supply.
• E)the price level and unemployment.

---

Definitions:

Inhibited Temperament

A personality trait characterized by shyness, cautiousness, and high levels of emotional reactivity to new or unfamiliar situations.

Difficult Temperament

A behavioral profile characterized by high reactivity and difficulty adapting to changes or regulating emotions.

Slow-To-Warm-Up

A temperament trait describing individuals who are typically cautious and less engaging in new situations but gradually become more comfortable with exposure.

Phobic Disorder

A type of anxiety disorder characterized by an extreme, irrational fear of specific situations, objects, or activities, leading to avoidance behaviors.