Consider an economy that is initially in its​ long-run equilibrium. Suppose this economy suffers a temporary negative su

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answerhappygod
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Consider an economy that is initially in its​ long-run equilibrium. Suppose this economy suffers a temporary negative su

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Consider an economy that is initially in its​ long-run
equilibrium. Suppose this economy suffers a temporary negative
supply shock. If the central​ bank’s sole objective is to
stabilize output in the​ short-run, then what will happen
after the central bank has responded according to
its​ objective?
A.
Inflation will be​ lower, output will back at its original
level
B.
Inflation will be​ lower, output will be lower
C.
Inflation will be​ higher, output will be higher
D.
Inflation will be​ lower, output will be higher
E.
Inflation will be​ higher, output will be lower
F.
Inflation will be​ higher, output will back at its original
level
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