If Prices Are Inflexible, Monetary Policy

question 111

Multiple Choice

If prices are inflexible, monetary policy:

• A)affects both inflation and real output.
• B)affects real output but not inflation.
• C)affects inflation but not real output.
• D)doesn't affect real output or inflation.

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Definitions:

Credits

Entries on the right side of an account, indicating an increase in liabilities, equity, or revenue, or a decrease in assets or expenses.

Posting Reference Notation

A unique code or number used to track the entry of a transaction in the accounting records to its source document.

Journal

A book or electronic record in which transactions are recorded in chronological order before they are posted to ledger accounts.

Page Number

A number assigned to a specific page in a document or book to facilitate organization and reference.