The Short Run Sequence of Events Following an Unanticipated Shift

question 161

Multiple Choice

The short run sequence of events following an unanticipated shift to a more restrictive monetary policy would be

• A) lower interest rates, decrease in aggregate demand, and a reduction in output.
• B) lower interest rates, increase in aggregate demand, and an expansion in output.
• C) higher interest rates, decrease in aggregate demand, and a reduction in output.
• D) higher interest rates, increase in aggregate demand, and an expansion in output.

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