If the Fed Responds to Repeated Decreases in the Short-Run

question 17

Multiple Choice

If the Fed responds to repeated decreases in the short-run aggregate supply with repeated increases in the quantity of money, the economy will be faced with

• A) a one-time increase in prices.
• B) continuous inflation.
• C) alternating periods of inflation and deflation.
• D) steady decreases in real GDP.

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Definitions:

Terrorism

The use of violence and intimidation, especially against civilians, in the pursuit of political goals.

Victims

Individuals who suffer harm, injury, or loss as a result of a crime, accident, or other event or action.

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Scientists who study society and social behavior by examining the groups, cultures, organizations, social institutions, and processes that develop when people interact and work together.