There Is an Adverse Supply Shock

question 18

Multiple Choice

There is an adverse supply shock.In response the Federal Reserve pursues an expansionary monetary policy.Taking into account both the shock and the Federal Reserve's policy,which of the following are we sure of?

• A)unemployment will be higher
• B)unemployment will be lower
• C)inflation will be higher
• D)inflation will be lower

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Definitions:

Fahrenheit

A scale for temperature measurement where water freezes at 32 degrees and boils at 212 degrees under standard atmospheric pressure.

Multicellular Parasites

Organisms composed of multiple cells that live off and may harm their hosts, obtaining nutrients at the host's expense.

Scabies

Scabies is a contagious skin condition caused by tiny mites burrowing into the skin, leading to intense itching and a rash.

Lice

Parasitic insects that infest the hair and skin of humans and animals, causing itching and discomfort.