Suppose Most People Had Anticipated That Inflation Would Be 3

question 89

Multiple Choice

Suppose most people had anticipated that inflation would be 3% in the coming year because the Fed would increase the money supply by 3%.Instead,the Fed increases the money supply by 5%.In the short run,this would cause actual output to be ________ full-employment output and prices to increase by ________ 3%.

• A)above; more than
• B)above; less than
• C)below; more than
• D)below; less than