Which of the following would be represented by a negative value of the random demand shock, $\varepsilon$_t? A) an irrational wave of optimism among investors B) a decrease in government spending C) an aggressive increase in oil prices by a cartel D) a decrease in the central bank's inflation target

Question

Quizplus · Accepted Answer

A negative value of the random demand shock would represent a decrease in aggregate demand, such as a decrease in government spending.

Which of the Following Would Be Represented by a Negative ε\varepsilonε

Which of the Following Would Be Represented by a Negative $\varepsilon$