Purchase Solution

Aggregate supply and demand

Not what you're looking for?

Ask Custom Question

"The idea of the Fed having to choose between hawk and dove policies after an adverse supply shock is plain silly. All the Fed has to do is shift the curve back to its original position, which would prevent both recession and inflation. Do you agree? Why or why not?

Purchase this Solution

Solution Summary

The solution answers the question(s) below.

When we talk of a supply shock, like an oil shortage for example, there is not

Solution Preview

When we talk of a supply shock, like an oil shortage for example, there is not much the Fed can do except drill for oil. The Fed is not all-powerful and cannot dial in exactly the right position for the economy's 'curve' to be in. First the economy is a moving target. The Fed is always reacting to economic news. They do not make the news.

The Fed will ...

Purchase this Solution

Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.