If the FED accommodates an adverse supply shock, then output falls less; less more; more more; less less; more but prices rise

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Please highlight the correct answer for each of the two questions and explain why the correct answer is right if you can. 

If the FED accommodates an adverse supply shock, then output falls
less; less
more; more
more; less
less; more
but prices rise
Transcribed Image Text:If the FED accommodates an adverse supply shock, then output falls less; less more; more more; less less; more but prices rise
A favorable supply shock occurs when:
unions push wages up
an oil cartel breaks up and oil prices fall
environmental protection laws raise costs of production
the FED increases the money supply
Transcribed Image Text:A favorable supply shock occurs when: unions push wages up an oil cartel breaks up and oil prices fall environmental protection laws raise costs of production the FED increases the money supply
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