If the Public Believes the Commitment to a Nominal Anchor

question 41

Multiple Choice

If the public believes the commitment to a nominal anchor to be credible,the effect of a positive aggregate demand shock is for ________.

• A)short-run aggregate supply to shift up
• B)short-run aggregate supply to be unaffected
• C)short-run aggregate supply to shift down
• D)inflation,but not economic activity,to increase

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Definitions:

Uncertainty

The lack of certainty or predictability in situations, which can impact decision-making and planning in businesses and personal affairs.

Inventories

Quantities of goods or materials that are held by a business as part of its current assets for the purpose of resale or production.

Supply Chain

A system connecting a business with its providers to manufacture and deliver a particular item to the end consumer.

Purchase Transactions

Financial exchanges or agreements where goods or services are bought and paid for.