Business, 03.12.2019 01:31 DisneyGirl11

The economy is growing at its long-run potential growth rate of 3% with an inflation rate of 4% if a positive aggregate demand shock occurs and the fed responds by decreasing money growth, but fails to offset the aggregate den shock, then in the short run: a. the real growth rate will be 3%, and the inflation rate will be 4%. b. the real growth rate will be higher than 3% and the inflation rate will be lower than 4%. c. the real growth rate will be lower than 3%, and the inflation rate will be lower than 4%. d. the real growth rate will be higher than 3% and the inflation rate will be higher than 4%.

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The economy is growing at its long-run potential growth rate of 3% with an inflation rate of 4% if a...

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