If the Fed Wants to Reverse the Effects of a Favorable

question 222

Multiple Choice

If the Fed wants to reverse the effects of a favorable supply shock on the inflation rate, it should

• A)increase the money supply growth rate which also moves unemployment closer to its natural rate.
• B)increase the money supply growth rate, but this moves unemployment further from its natural rate.
• C)decrease the money supply growth rate which also moves unemployment closer to its natural rate.
• D)decrease the money supply growth rate, but this moves unemployment further from its natural rate.

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Definitions:

Southerners

Individuals from the southern part of a country, often referring to those from the southern United States.

Freedman's Bureau

A U.S. federal government agency established in 1865 to aid freed African American slaves during the Reconstruction era by providing food, housing, education, and legal support.

President Johnson

Refers to Lyndon B. Johnson, the 36th President of the United States, known for his significant domestic policies, including the Great Society and civil rights advancements.

Emancipation Process

The series of actions leading to the liberation of slaves, most notably exemplified by the Emancipation Proclamation in the United States during the Civil War.