Starting from long-run equilibrium, a negative inflation shock results in a short-run equilibrium with ___ inflation and ____ output.
A)higher; higher
B)higher; lower
C)higher; potential
D)lower; lower

Question

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The Answer of Starting from long-run equilibrium, a negative inflation shock results in a short-run equilibrium with ___ inflation and ____ output.
A)higher; higher
B)higher; lower
C)higher; potential
D)lower; lower

Starting from Long-Run Equilibrium, a Negative Inflation Shock Results in a Short-Run