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If the Central Bank Responds to a Single Negative Supply

Question 24

Multiple Choice

If the central bank responds to a single negative supply shock with monetary validation,we can expect an increase in


A) the money supply but a decrease in costs and prices.
B) costs but a decrease in real national income.
C) the size of the output gap.
D) costs,the price level,and the money supply.
E) the price level and unemployment.

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