Multiple Choice
Will a supply shock that shifts the SP curve upward leave it permanently at its new higher position?
A) A permanent shock will;a temporary shock cannot.
B) A permanent shock may if inflationary expectations are raised;a temporary shock cannot in any case.
C) Permanent or temporary shocks may if inflationary expectations are raised.
D) In no case will SP stay at its higher position.
Correct Answer:
Verified
Correct Answer:
Verified
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