A Negative Shock in Aggregate Demand Will Likely Result in ________

question 63

Multiple Choice

A negative shock in aggregate demand will likely result in ________.

• A)a short run decrease in output
• B)a permanently lower equilibrium inflation rate if the central bank does not respond by lowering interest rates
• C)an eventual increase in aggregate supply for any inflation rate if the central bank does not respond by lowering interest rates
• D)all of the above
• E)none of the above

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Definitions:

Legitimize

To make something legal, acceptable, or official.

Godparents

Individuals selected to be responsible for the religious education and guidance of a child, typically in Christian baptisms.

Warm and Affectionate

Showing feelings of love, care, and kindness openly and comfortably.

Only Ceremonial

Referring to events or practices that are purely formal or symbolic, without legal or substantial effect.