In which case, if any, will inflation remain higher after a temporary adverse supply shock?
a. both when the central bank maintains a higher money supply growth rate and when the central bank does nothing
b. only if the central bank does nothing
c. only if the central bank maintains a higher money supply growth rate
d. None of the above is correct. Whether the central bank maintains a higher money supply growth rate or not, the inflation rate will return to its original level.
c
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The change in output resulting from the addition of one more worker is
A) marginal physical product. B) marginal revenue product. C) average physical product. D) average revenue product.
A country is likely to have a higher sacrifice ratio if
a. contracts are shorter, and people believe the central bank will reduce inflation. b. contracts are longer, and people believe the central bank will not reduce inflation c. contracts are longer, and people believe the central bank will reduce inflation. d. contracts are shorter, and people believe the central bank will not reduce inflation.