How would a negative real shock be represented in the AS/AD model?
A. As a leftward shift of the long-run aggregate supply curve that reduces growth and increases inflation.
B. As a rightward shift of the long-run aggregate supply curve that reduces growth and increases inflation.
C. As a leftward shift of the long-run aggregate supply curve that increases growth and reduces inflation.
D. As a rightward shift of the long-run aggregate supply curve that increases growth and reduces inflation.
Ans: A. As a leftward shift of the long-run aggregate supply curve that reduces growth and increases inflation.
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A) upward sloping. B) perfectly inelastic. C) perfectly elastic. D) downward sloping.
The branch of economics which studies how households and firms interact in markets is called
A) macroeconomics. B) microeconomics. C) positive economics. D) normative economics.