A large increase in oil prices is an example of:
A)a favorable inflation shock.
B)an adverse inflation shock.
C)inflation inertia.
D)excessive aggregate spending.

Question

Quizplus · Accepted Answer

Inflation shocks occur when some event disrupts the usual pattern of inflation. The large increase in world oil prices during the 1970's is an example of this type of shock. An inflation shock that increases inflation is called an adverse inflation shock.

A Large Increase in Oil Prices Is an Example Of