If a central bank were required to target inflation at zero, then when there was an unanticipated decrease in aggregate demand the central bank
a. would have to increase the money supply. This would move unemployment closer to the natural rate.
b. would have to increase the money supply. This would move unemployment further from the natural rate.
c. would have to decrease the money supply. This would move unemployment closer to the natural rate.
d. would have to decrease the money supply. This would move unemployment further from the natural rate.
a
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A firm's break-even price is the price that is just equal to the minimum point of the AVC curve, in the short run
a. True b. False Indicate whether the statement is true or false
Starting from long-run equilibrium, use the basic aggregate demand and aggregate supply diagram to show what happens in both the long run and the short run when there is an increase in wealth
What will be an ideal response?