Beginning at long-run equilibrium in the dynamic model of aggregate demand and aggregate supply, in the period in which a positive supply shock occurs, output _____ and inflation _____.
A) increases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; increases

Question

Quizplus · Accepted Answer

The Answer of Beginning at long-run equilibrium in the dynamic model of aggregate demand and aggregate supply, in the period in which a positive supply shock occurs, output _____ and inflation _____.
A) increases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; increases

Beginning at Long-Run Equilibrium in the Dynamic Model of Aggregate