If the aggregate price level ________, but nominal wages stay fixed, labor demand ________

For a given aggregate supply curve, price level and output will both increase when aggregate demand decreases

a. True b. False Indicate whether the statement is true or false

Which of the following is a possible cure for ongoing inflation?

a. The Fed could pursue anti-cyclical monetary policy. b. The Fed could increase money supply whenever the AD curve shifts to the right. c. The Fed could maintain a constant interest rate target regardless of economic circumstances. d. The Fed could always try to keep the unemployment rate below the natural rate. e. The Fed could pursue anti-cyclical fiscal policy.