13) Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. If the commitment is credible, then A) the short-run aggregate supply curve will not shift. B) the public's expected inflation will remain unchanged. C) over time inflation will fall back down to the inflation target. D) all of the above. E) both A and B.
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Home » Business » 13) Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. If the commitment is credible, then A) the short-run aggregate supply curve will not shift.