If the Public Believes That the Commitment to a Nominal

question 80

Multiple Choice

If the public believes that the commitment to a nominal anchor is not credible,the effect of a positive aggregate demand shock is for ________.

• A)short-run aggregate supply to shift down
• B)short-run aggregate supply to remain unchanged
• C)short-run aggregate supply to shift up
• D)inflation,but not economic activity,to increase

---

Definitions:

Units-Of-Activity

A depreciation method that allocates expenses based on the actual usage or activity levels of an asset.

Salvage Value

A projection of an asset's value at the end of its period of functionality.

Depreciation Cost

The systematic allocation of an asset's cost over its useful life to reflect the loss in value over time.

Plant Asset

Long-term tangible assets that are used in the production of goods and services, including machinery, buildings, and equipment.