Question

Which statement is TRUE? Please choose the correct answer from the following choices, and then select the submit answer button.

a) If the AD curve shifts left, the Fed can decrease the money supply to move the AD curve back to the right.
b) Since World War II, the Fed has only slowed down the economy one time.
c) There is no difference between the deflation of the Great Depression and the disinflation of the 1980s.
d) A credible disinflation decreases the unemployment effects of disinflation.

Answer 1

D

Step-by-step explanation:

Disinflation is a situation where, there is a reduction or decrease in inflation; during this period the economy experiences a slowdown with regards to the rate of increase of the general price level; thus a credible disinflation decreases the unemployment effect of disinflation.