Use the following to answer questions: Figure Real Shocks
-(Figure: Real Shocks) From Point X in the accompanying graph, a negative supply shock could change the inflation rate to:

Question

Use the following to answer questions: Figure Real Shocks 
-(Figure: Real Shocks) From Point X in the accompanying graph, a negative supply shock could change the inflation rate to:

Quizplus · Accepted Answer

A negative supply shock shifts the short-run aggregate supply (SRAS) curve leftward, leading to higher prices and lower output. From Point X, the initial inflation rate is 2%, but a negative supply shock could increase it to around 7%.

Use the Following to Answer Questions: Figure Real Shocks