Question a central bank reduces the money supply in

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Question A central bank reduces the money supply in an economy initially in long-run equilibrium. a. What will happen to output and prices in the short run? b. What will happen to unemployment in the short run? c. What will happen to output and prices in the long run?
Add Question Here Essay 1 points Question An oil cartel effectively increases the price of oil by 100 percent, leading to an adverse supply shock in both Country A and Country B. Both countries were in long-run equilibrium at the same level of output and prices at the time of the shock. The central bank of Country A takes no stabilizing policy actions. After the short-run impacts of the adverse supply shock become apparent, the central bank of Country B increases the money supply to return the economy to full employment. a. Describe the short-run impact of the adverse supply shock on prices and output in each country. b. Compare the long-run impact of the adverse supply shock on prices and output in each country.
Add Question Here Essay 1 points Question An economy is initially in long-run equilibrium. The introduction of an electronic payments system dramatically reduces the demand for money in the economy. a. What is the short-run impact on prices and output of the new system? b. What can the central bank do, if anything, to counteract the short-run changes in output and prices? c. If the central bank does not take any policy actions, what will be the long-run impact of the electronic payments system on prices and output?
Add Question Here Essay 1 points

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