A supply shock that reduces labor productivity
A) causes accelerating inflation if the Fed attempts to maintain the original output level.
B) will increase real wages if nominal wages are flexible.
C) will reduce the level of output at the natural level of real GDP even if employment does not decline.
D) A and C.
D
Economics
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Fill in the blank(s) with correct word
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What are the primary arguments for and against the independence of the Fed?
What will be an ideal response?
Economics