A Shock Increases the Costs of Production

question 13

Multiple Choice

A shock increases the costs of production.Given the effects of this shock,if the central bank wants to return the unemployment rate towards its previous level it would

• A)increase the rate at which the money supply increases.This will also move inflation closer to its previous rate..
• B)increase the rate at which the money supply increases.However,this will make inflation higher than its previous rate
• C)decrease the rate at which the money supply increases.This will also move inflation closer to its original rate
• D)decrease the rate at which the money supply increases.However,this will make higher than its previous rate.

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Definitions:

Evolutionary Theory

A theory that explains how species evolve and adapt over time through the mechanisms of natural selection and genetic variation.

Natural World

Encompasses all living and non-living things occurring naturally on Earth, excluding the products of human activity.

Intelligence

The ability to learn, understand, and apply knowledge, solve problems, and adapt to new situations.

Schizophrenia

A mental disorder characterized by abnormal behavior, disorganized speech, and a decreased ability to understand reality.