When Hit with a Negative Real Shock,the Fed Must Pick

question 107

Multiple Choice

When hit with a negative real shock,the Fed must pick a policy that chooses between:

• A) a growth rate that's too low and an unemployment rate that's too high.
• B) a growth rate that's too low and an inflation rate that's too high.
• C) a growth rate that's too high and wages that are too low.
• D) a growth rate that's too high and a savings rate that's too low.