Suppose That There Is a Negative Aggregate Supply Shock and the Central

question 23

Multiple Choice

Suppose that there is a negative aggregate supply shock and the central bank commits to an inflation rate target.

• A)If the commitment is credible,the public's expected inflation will remain unchanged.
• B)Credible policy produces better outcomes on both inflation and output in the short run.
• C)Policies that are not credible produce worse economic contraction.
• D)all of the above.
• E)both A and C.

---

Definitions:

Financial Reports

Documents that detail the financial health and performance of a business, including balance sheets, income statements, and cash flow statements.

Rent Expired

The portion of the rental period that has elapsed or the cost of rent that has been used up over a specific accounting period.

Accounting Period

A specific time span for which financial records are maintained and reported, such as a fiscal year or quarter.

Accumulated Depreciation

The total amount of an asset's cost that has been allocated as depreciation expense since the asset was put into use.