An Unexpected Shift to a More Expansionary Monetary Policy Will

question 84

Multiple Choice

An unexpected shift to a more expansionary monetary policy will generally

• A) stimulate aggregate demand and real output as soon as the policy is instituted.
• B) exert its primary impact on aggregate demand and real output 6 to 15 months in the future.
• C) cause inflation in the short run, but expand real output in the long run.
• D) increase real interest rates in the short run.

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Definitions:

Bait-And-Switch

A deceptive marketing practice where customers are lured by advertisements for a product at a low price, only to be persuaded to buy a more expensive item.

Lower-Quality Substitute

An alternative option that is considered to be of lesser quality or value compared to the original or preferred choice.

Purchase Order

A form that authorizes a purchase for the practice.

Authorizes Purchase

The act of giving official permission for acquiring goods or services, typically involving a formal approval process within organizations.