If most shocks to the economy are ________ shocks, then ________
A) aggregate demand; inflation stabilization policy will also stabilize activity in the short-run
B) permanent aggregate supply; inflation stabilization policy will also stabilize activity in the short-run
C) temporary aggregate supply; inflation stabilization policy has no impact on economic activity in the long-run
D) all of the above
E) none of the above
D
You might also like to view...
Examining data on cyclical unemployment plotted against unanticipated inflation shows
A) a positive relationship. B) a negative relationship. C) no significant relationship. D) a relationship only during the 1960s.
The typical result of an adverse supply shock is
A. falling output accompanied by accelerating inflation. B. falling output accompanied by decelerating inflation. C. rising output accompanied by accelerating inflation. D. rising output accompanied by decelerating inflation.