Quizzol

QUESTION:

Policymakers are said to "accommodate" an adverse supply shock if they _______.

a. respond to the adverse supply shock by increasing aggregate demand, which further raises prices

b. respond to the adverse supply shock by decreasing short-run aggregate supply

c. respond to the adverse supply shock by decreasing aggregate demand, which lowers prices

d. fail to respond to the adverse supply shock and allow the economy to adjust on its own

ANSWER:

a. respond to the adverse supply shock by increasing aggregate demand, which further raises prices

Posted by Cleveland on September 10, 2024