Author Question: In 1973, 1979 and 2007, the U.S. economy was hit by ________. A) the collapse of the financial ... (Read 35 times)

joe · **on:** Jun 30, 2018

In 1973, 1979 and 2007, the U.S. economy was hit by ________.

A) the collapse of the financial sector
B) the assassination of a Federal Reserve Board member
C) three major aggregate supply shocks
D) the after-effects of the process of creative destruction

Question 2

Consider two similar economies hit by the same temporary negative supply shock. In the economy with the more credible monetary policy, there will be ________.

A) smaller increases in both inflation and the real interest rate
B) a smaller increase in inflation and larger increase in the real interest rate
C) a smaller increase in inflation and larger decrease in output
D) a smaller increase in output and larger increase in the real interest rate