a. consistent with the conclusion of Friedman and Phelps, but it is not consistent with the classical idea of monetary neutrality. b. consistent with the classical idea of monetary neutrality, but it is not consistent with the conclusion of Friedman and Phelps. c. consistent with both the conclusion of Friedman and Phelps and the classical idea of monetary neutrality. d. consistent with neither the conclusion of Friedman and Phelps nor the classical idea of monetary neutrality. QUESTION 41 If there is a favorable supply shock, inflation will a. increase and shift the short-run Phillips curve left. b. decrease and shift the short-run Phillips curve right. © c. increase and shift the short-run Phillips curve right. d. decrease and shift the short-run Phillips curve left. QUESTION 42 If there is a favorable supply shock causes, then a. the price level decreases. To counter this a central bank would decrease the money supply. b. the price level increases. To counter this a central bank would increase the money supply. c. the price level decreases. To counter this a central bank would increase the money supply. d. the price level increases. To counter this a central bank would decrease the money supply.

a. consistent with the conclusion of Friedman and Phelps, but it is not consistent with the classical idea of monetary neutrality. b. consistent with the classical idea of monetary neutrality, but it is not consistent with the conclusion of Friedman and Phelps. c. consistent with both the conclusion of Friedman and Phelps and the classical idea of monetary neutrality. d. consistent with neither the conclusion of Friedman and Phelps nor the classical idea of monetary neutrality. QUESTION 41 If there is a favorable supply shock, inflation will a. increase and shift the short-run Phillips curve left. b. decrease and shift the short-run Phillips curve right. © c. increase and shift the short-run Phillips curve right. d. decrease and shift the short-run Phillips curve left. QUESTION 42 If there is a favorable supply shock causes, then a. the price level decreases. To counter this a central bank would decrease the money supply. b. the price level increases. To counter this a central bank would increase the money supply. c. the price level decreases. To counter this a central bank would increase the money supply. d. the price level increases. To counter this a central bank would decrease the money supply.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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answer with detailed explanation for 3 & 4