The Short-Run Impact of an Unanticipated Shift to a More

question 21

Multiple Choice

The short-run impact of an unanticipated shift to a more restrictive monetary policy is most likely to be a reduction in

• A) prices, while real output is unaffected.
• B) the rate of unemployment.
• C) real output.
• D) the size of the budget deficit.

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Definitions:

Square Meters

A unit of area measurement in the metric system, equivalent to the area of a square with sides one meter in length.

Horizontal Asymptote

A line that a graph approaches but never touches as the inputs grow large in magnitude.

\(g(x)\)

Represents a function named g that is dependent on a variable x.

Graph

A visual outline that maps the structure of relationships or interconnections among a number of things using specific signs like dots, lines, and bars.