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If the Public Believes the Commitment to a Nominal Anchor

Question 70

Multiple Choice

If the public believes the commitment to a nominal anchor to be credible,the effect of a negative aggregate demand shock is for ________.


A) short-run aggregate supply to shift up
B) short-run aggregate supply to be unaffected
C) short-run aggregate supply to shift down
D) inflation,but not economic activity,to decrease

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