The Long-Run Response to a Decrease in the Growth Rate

question 139

Multiple Choice

The long-run response to a decrease in the growth rate of the money supply is shown by shifting which of the Phillips curves and in what direction?

• A) by shifting the short-run and long-run Phillips curves left
• B) by shifting the short-run and long-run Phillips curves right
• C) by shifting only the short-run Phillips curve left
• D) by shifting only the short-run Phillips curve right

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Definitions:

Interest-Rate Cost-Of-Funds

The cost of borrowing money, determined by the interest rate paid on funds obtained through loans or credit.

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The anticipated profit or loss from an investment, considering all possible outcomes weighted by their probabilities.

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