Suppose that the money prices of raw materials increase so that short-run aggregate supply decreases. If the Federal Reserve does not respond, the higher money price of raw materials will
i. repeatedly shift the aggregate demand curve rightward and raise the price level.
ii. shift the aggregate demand curve rightward and the aggregate supply curve leftward, raising prices.
iii. result initially in lower employment and a higher price level.
A) i only
B) both i and ii
C) iii only
D) both ii and iii
E) i and iii
C
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According to the text, which of the following consequences could we predict most confidently if the federal government was effectively required, by a constitutional amendment,
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The demand curve can be derived from indifference curves by varying the price of the commodity in question
a. True b. False Indicate whether the statement is true or false