Downward inflation shocks and negative shocks to potential output are
A) reasons for the downward slope of the aggregate demand (ADI)curve.
B) types of autonomous expenditures.
C) necessary to avoid inflation inertia.
D) ways to control inflation.
E) sources of inflation.

Question

Quizplus · Accepted Answer

Downward inflation shocks and negative shocks to potential output are sources of inflation as they can affect the overall price level and economic output, influencing inflation dynamics.

Downward Inflation Shocks and Negative Shocks to Potential Output Are