Solved

What Is the Main Difference Between a Temporary and Permanently

Question 6

Multiple Choice

What is the main difference between a temporary and permanently negative supply shock?


A) The real interest rate immediately decreases after a temporary shock while it eventually increases after a permanent shock.
B) Output increases right away after a temporary shock but the impact does not last whereas for a permanent shock output permanently decreases.
C) A temporary shock will see a permanent increase in inflation while inflation will only rise temporarily after a permanent shock.
D) all of the above
E) none of the above

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions