In Response to an Adverse Supply Shock,suppose the Fed Implements

question 11

Multiple Choice

In response to an adverse supply shock,suppose the Fed implements accommodating monetary policy.Which of the following occurs as a result of the accommodating monetary policy?

• A)Aggregate demand shifts to the left,which increases inflation and increases unemployment in the short run.
• B)Aggregate demand shifts to the left,which decreases inflation and increases unemployment in the short run.
• C)Aggregate demand shifts to the right,which increases inflation and increases unemployment in the short run.
• D)Aggregate demand shifts to the right,which increases inflation and decreases unemployment in the short run.

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Definitions:

Bureau of Labor Statistics

A U.S. government agency responsible for collecting, analyzing, and disseminating essential statistical data about labor markets, working conditions, and price changes.

U.S. Labor Force

The total supply of workers in the United States, including both employed and unemployed individuals actively seeking employment.

Employment Trends

Patterns or changes in the job market and employment practices over a period, often analyzed to predict future employment scenarios.

External Labor Market

The pool of potential job candidates from outside the organization.