Isolated negative aggregate supply shocks,in the absence of monetary validation,will
A) eventually be self-correcting as wages slowly fall.
B) never be self-correcting without government policy to expand the money supply.
C) be self-correcting only if the aggregate demand curve shifts.
D) result in a permanent output gap.
E) have no short-run or long-run effects.
Correct Answer:
Verified
Q60: Q61: Suppose an increase in world oil prices Q62: Suppose there is a positive AD shock,and Q63: Suppose the AS curve is continuously shifting Q64: "Demand inflation" refers to Q66: Economists use the term "monetary validation" to Q67: Suppose the economy is at full employment Q68: The reason that some economists advise central Q69: Suppose the economy is in a long-run Q70: There can be strong pressure on the![]()
A)the inflation that results
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