Suppose that a central bank reduces the money supply growth rate to disinflate. What does disinflation mean? If people do not alter their inflation expectations, what happens to output and unemployment?
Disinflation means a reduction in the inflation rate. Output would fall and unemployment would rise.
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Why is the money multiplier considered to be a potential multiplier rather than an indication of exactly how much multiplication should be expected?
The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000
Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Refer to the data. Creamy Crisp's implicit costs, including a normal profit, are: A. $136,000. B. $150,000. C. $94,000. D. $156,000.