Why do negative supply shocks present such a difficulty for the Federal Reserve?
a. the Fed can choose to fight the rising price level, but this will result in lower unemployment.
b. the Fed can choose to fight the rising unemployment, but this will result in an even lower price level.
c. the Fed can choose to fight the falling unemployment, but this will result in an even higher price level.
d. the Fed can choose to fight the rising unemployment, but this will result in an even higher price level.
e. the Fed can choose to fight the rising unemployment, but this will result in higher taxes.
D
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Only Federal Reserve banks can issue paper currency in the United States, and their power to do so is virtually unlimited
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Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000 . Michael's consumer surplus is
a. $500. b. $3,000. c. $3,500. d. $6,500.