Inflation shocks and shocks to potential output are called ________ shocks.
A)monetary policy
B)fiscal policy
C)aggregate supply
D)aggregate demand

Name: Inflation shocks and shocks to potential output are called ________ shocks. A)monetary policy B)fiscal policy C)aggregate supply D)aggregate demand
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Question

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An aggregate supply shock is either an inflation shock or a shock to potential output. Adverse aggregate supply shocks of both types reduce output and increase inflation.

Inflation Shocks and Shocks to Potential Output Are Called ________