If the Fed Makes a Credible Announcement That It Will

question 140

Multiple Choice

If the Fed makes a credible announcement that it will now increase the growth of aggregate demand with faster money growth, there will be

• A) an upward shift of the short-run Phillips curve so that there is higher inflation without a decrease in unemployment.
• B) a movement upward along an unchanging short-run Phillips curve so that inflation rises and unemployment decreases.
• C) a rightward shift of the long-run Phillips curve.
• D) no change in inflation or unemployment because the policy is credible and now anticipated.
• E) a leftward shift of the long-run Phillips curve.

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Matrilineal

A societal system in which lineage, inheritance, and social affiliation are traced through the mother's line.

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Relating to a societal system where lineage, inheritance, and social identity are primarily traced through the father's line.

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The complex system of relationships among members of an extended family, including immediate family, cousins, in-laws, and other kin.