Business
Business, 11.12.2019 06:31, ashbromail

One of the most difficult policy decisions faced by the federal reserve bank (the fed) is how to use monetary policy in response to a real negative shock such as a severe drought. answer the questions and assume that the federal reserve bank decides to address the negative real shock by focusing on inflation instead of a recession.
a. as a result of the real negative shock, the inflation rate in the economy will.
b. to remedy this situation, the federal reserve will seek to aggregate demand.
c. the fed is likely to the money supply in order to impact aggregate demand.
d. if the fed takes this approach, the real growth rate will from the point to which it was shifted by the real negative shock.

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