Author Question: If the Federal Reserve chooses to fight high inflation with contractionary monetary policy and firms ... (Read 81 times)

wrbasek0 · **on:** Jun 29, 2018

If the Federal Reserve chooses to fight high inflation with contractionary monetary policy and firms and consumers expect this policy to reduce inflation, which of the following would you expect to see?

A) a downward shift of the short-run Phillips curve
B) a decrease in the long-run aggregate supply curve
C) an increase in inflationary expectations
D) a reduction in the unemployment rate

Question 2

Refer to Figure 4-5. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the quantity of apartments demanded at the new price?

A) 0 B) Q0 C) Q1 D) Q