Which of the Following Is the Least Likely Take Place

question 24

Multiple Choice

Which of the following is the least likely take place if the Fed responds to a negative demand shock by reducing the real interest rate?

• A)IS shifts to the right
• B)output gap returns to zero
• C)inflation returns to its previous rate
• D)MP shifts down

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Definitions:

Small-Scale Producers

Individuals or businesses engaged in the production of goods on a limited scale, often characterized by handcrafted or artisanal methods.

Dominant Class

Refers to the social group holding the most power, wealth, or influence within a society at a given time.

Livestock

Domesticated animals raised in an agricultural setting to produce commodities such as meat, milk, and wool.

Peons

Historically, laborers or workers in Latin America who were indebted to their employers, often working for little or no pay to pay off a debt.