4. If the central bank responds aggressively to the output gap, a supply shock will have a....

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4. If the central bank responds aggressively to the output gap, a supply shock will have

a. a larger impact on inflation but a smaller impact on output.

b. a smaller impact on inflation but a larger impact on output.

c. a larger impact on both inflation and output.

d. a smaller impact on both inflation and output.

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Macroeconomics

ISBN: 9781319263904

11th Edition

Authors: N. Gregory Mankiw

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