Refer to the table below. The average total cost of producing 20 units of output is:

Equal increases in government purchases and in net taxes have equal but opposite effects on the level of real GDP demanded

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

Negative supply shocks confront the Fed with a dilemma because

a. full employment is no longer possible b. the costs of fulfilling one objective are paid in terms of failure to meet the other c. inflation cannot be prevented considering the reduced supply d. all policy choices are equally undesirable e. such shocks are entirely unpredictable