If Policy-Makers Attempt to Offset a Downward Inflation Shock with Monetary

question 169

Multiple Choice

If policy-makers attempt to offset a downward inflation shock with monetary _________,the resulting long-run equilibrium will be at _________ inflation rate compared to allowing the self-correcting mechanism to return the economy to potential output.

• A) "tightening";a higher
• B) "tightening";a lower
• C) "easing";a higher
• D) "easing";a lower
• E) "easing";the same

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