If a central bank were required to target inflation at zero, then when there was an unanticipated increase in aggregate supply 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.
b
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Refer to Figure 9.6. As a result of this policy, producer surplus will be
A) $2000. B) $3375. C) $4500. D) $6000. E) $12,000.
Plot the demand for caviar given the following information on quantity consumed and total utility; then explain why caviar sells for such a high price. Quantity (in ounces) Total Utility (in dollars) 1 50 2753 884 95 599?
What will be an ideal response?