In the Short Run,if the Federal Reserve Responds to a Negative

question 180

Multiple Choice

In the short run,if the Federal Reserve responds to a negative real shock with an increase in money supply growth,the inflation rate will increase because of:

• A) the real shock only.
• B) the increase in money growth only.
• C) both the real shock and the increase in money growth.
• D) some reason other than the real shock and the increase in money growth.

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