When They Are Confronted with an Adverse Shock to Aggregate

question 23

Multiple Choice

When they are confronted with an adverse shock to aggregate supply,policymakers face a difficult choice in that

• A)if they contract aggregate demand,the unemployment rate will increase further.
• B)if they expand aggregate demand,the inflation rate will increase further.
• C)they face a less favorable trade-off between inflation and unemployment than they did before the shock.
• D)All of the above are correct.

---

Definitions:

Words

are units of language, composed of one or more spoken sounds or their written representation, that function as a principal carrier of meaning.

Syntax

The arrangement of words and phrases to create well-formed sentences in a language.

Semantics

The branch of linguistics concerned with the meaning of words and language.

Symbolic

Pertaining to symbols or symbolism; representing something else through association, resemblance, or convention.