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If the Economy Is at Potential Output and the Fed

question 167

Multiple Choice

If the economy is at potential output and the Fed decreases the money supply so that actual output is less than potential output, eventually nominal wages will_____ and short-run aggregate supply will _____.


Definitions:

Kidney

An organ in vertebrates that filters waste from the blood, regulates body fluids, and excretes urine.

Urine Concentration

The process by which the kidneys regulate the water content and solute composition of the urine.

Urea

Urea is a nitrogenous compound produced in the liver as a waste product of protein metabolism, excreted in urine.

Collecting Ducts

Channels within the kidneys responsible for gathering urine from the nephrons and moving it towards the renal pelvis.

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