In Which Case,if Any,will Inflation Remain Higher After a Temporary

question 50

Multiple Choice

In which case,if any,will inflation remain higher after a temporary adverse supply shock?

• A)both when the central bank maintains a higher money supply growth rate and when the central bank does nothing
• B)only if the central bank does nothing
• C)only if the central bank maintains a higher money supply growth rate
• D)None of the above is correct.Whether the central bank maintains a higher money supply growth rate or not,the inflation rate will return to its original level.

---

Definitions:

Red Sea

A seawater inlet of the Indian Ocean, lying between Africa and Asia, known for its unique marine life and extensive coral reefs.

Atoll

A curved to roughly circular reef that encloses a shallow, inner lagoon and low islands.

Continental Crust

The thick, granitic, and less dense part of the Earth's crust that forms the continents and continental shelves.

Mediterranean Sea

A sea connected to the Atlantic Ocean, surrounded by the Mediterranean region and almost completely enclosed by land, playing a crucial role in human history through trade and cultural exchange.