The Short-Run Impact of an Unanticipated Shift to a More

question 21

Multiple Choice

The short-run impact of an unanticipated shift to a more restrictive monetary policy is most likely to be a reduction in

• A) prices, while real output is unaffected.
• B) the rate of unemployment.
• C) real output.
• D) the size of the budget deficit.

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Definitions:

Average Cost

The cost per unit of output, calculated by dividing total costs by the total quantity of output produced.

Ovens

Cookery appliances designed for baking, roasting, and heating food through the application of direct or indirect heat.

Economies of Scope

Cost advantages that enterprises obtain through diversification and the production of a variety of goods rather than specializing in a single product.

Multiproduct Firms

Companies that produce and sell more than one product or service, often benefiting from economies of scope.