There Is a Temporary Adverse Supply Shock

question 37

Multiple Choice

There is a temporary adverse supply shock.Given the effects of this shock,if the central bank chooses to return unemployment closer to its previous rate it would

• A)raise the rate at which it increases the money supply.In the long run this will shift the short-run Phillips curve right.
• B)raise the rate at which it increases the money supply.In the long run this will shift the short-run Phillips curve left.
• C)reduce the rate at which it increases the money supply.In the long run this will shift the short-run Phillips curve right.
• D)reduce the rate at which it increases the money supply.In the long run this will shift the short-run Phillips curve left.

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Definitions:

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