Suppose That the Central Bank Is Required to Follow a Monetary

question 24

Multiple Choice

Suppose that the central bank is required to follow a monetary policy rule to stabilize prices.If the economy starts at long-run equilibrium and then aggregate supply shifts right,the central bank would have to

• A)increase the money supply,which causes output to move closer to its long-run equilibrium.
• B)increase the money supply,which causes output to move farther from long-run equilibrium.
• C)decrease the money supply,which causes output to move closer to its long-run equilibrium.
• D)decrease the money supply,which causes output to move farther from long-run equilibrium.

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Definitions:

Cyberstalking

The crime of stalking in cyberspace. The cyberstalker usually finds the victim through internet chat rooms, newsgroups, bulletin boards, or email and proceeds to harass that person or put the person in reasonable fear for his or her safety or the safety of his or her immediate family.

Internet

An international computer network offering extensive information and communication services.

E-Mail

A method of sending messages electronically from one user to another via the internet.

Money Laundering

Falsely reporting income that has been obtained through criminal activity, such as illegal drug transactions, as income obtained through a legitimate business enterprise, to make the "dirty" money "clean."