Suppose That the Central Bank Unexpectedly Reduces the Growth Rate

question 29

Multiple Choice

Suppose that the central bank unexpectedly reduces the growth rate of the money supply.In the short-run the effects of this are shown by

• A) moving to the left along the short-run Phillips curve.
• B) moving to the right along the short-run Phillips curve.
• C) shifting the short run Phillips curve right.
• D) shifting the short run Phillips curve left.

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Definitions:

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, used to prepare financial statements.

Inventory

The total amount of goods and materials a business holds for the purpose of resale or production.

Balance Sheet Column

Part of a financial statement that displays the company's assets, liabilities, and shareholders' equity at a specific point in time.

Ending Supplies

The value of supplies on hand at the end of an accounting period, prior to restocking or inventory adjustments.