According to the theory of liquidity preference, tightening the money supply will nominal interest rates in the short run, and, according to the fisher effect, tightening the money supply will nominal interest rates in the long run.

a) increase; increase
b) increase; decrease
c) decrease; decrease
d) decrease; increase

Feedback systems do not always involve negative feedback. economic inflation, which is evidenced by continually rising prices, is a positive feedback system. a positive feedback control system, as shown on the right, adds the feedback signal to the input signal, and the resulting signal is used as the input to the process. a simple model of the price-wage inflationary spiral is shown on the right. add additional feedback loops, such as legislative control or control of the tax rate, to stabilize the system. it is assumed that an increase in workers’ salaries, after some time delay, results an increase in prices. under what conditions could prices be stabilized by falsifying or delaying the availability of cost-ofliving data? how would a national wage and price economic guideline program affect the feedback system?