The Short Run Sequence of Events Following an Unanticipated Shift

question 161

Multiple Choice

The short run sequence of events following an unanticipated shift to a more restrictive monetary policy would be

• A) lower interest rates, decrease in aggregate demand, and a reduction in output.
• B) lower interest rates, increase in aggregate demand, and an expansion in output.
• C) higher interest rates, decrease in aggregate demand, and a reduction in output.
• D) higher interest rates, increase in aggregate demand, and an expansion in output.

---

Definitions:

Glee Club

A group of singers, often from a school or community, who perform together in unison or harmony.

Karaoke Bars

Entertainment venues where individuals sing along to songs using a microphone and a public address system, often featuring instrumental accompaniments.

Positive Statement

An objective statement based on empirical facts, which can be tested as true or false.

Unemployment Rate

The rate of individuals in the labor force who have no employment but are actively trying to find a job.