A Contractionary Monetary Policy That Has Been Imposed to Reduce

question 47

Multiple Choice

A contractionary monetary policy that has been imposed to reduce inflation will most likely

• A)have no effect on the short-run level of GDP and unemployment.
• B)not control inflation,since money supply changes have little or no effect on the price level.
• C)produce long-lasting unemployment if wages adjust rapidly.
• D)lead to a recession that is long and severe,under any circumstances.
• E)lead to a recession which will be short if inflation expectations adjust rapidly and accurately.

---

Definitions:

Beginning Inventory

The worth of merchandise ready to be sold at the beginning of a financial period.

Production Budget

An estimate of the total cost of production, including direct labor, materials, and overhead, for a specific period.

Beginning Inventory

The worth of merchandise ready for purchase at the beginning of a financial cycle.

Budgeted Sales

The projected amount of sales, in units or dollars, that a company plans to achieve in a specific period.