Multiple Choice
Suppose the economy is in equilibrium with an output gap equal to zero and the actual inflation rate equals the expected inflation rate.If the economy experiences a positive demand shock,the output gap will ________ and the inflation rate will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Correct Answer:
Verified
Correct Answer:
Verified
Q31: The oil shock of 2007-2008 saw the
Q32: Negative demand shocks have a tendency to
Q33: Explain three shocks that the Canadian economy
Q34: Once the Phillips curve has shifted up,the
Q35: As countries that currently use the euro,what
Q37: A reason that the inflation rate did
Q38: A decrease in the real interest rate
Q39: Positive supply shocks can have a tendency
Q40: The oil shock of 2007-2008 saw the
Q41: Figure 11.1<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB4177/.jpg" alt="Figure 11.1