All other things equal, most economists agree that in the event of a supply shock, the preferable policy is to fight the recession in the short run rather than the inflation.

Question

Quizplus · Accepted Answer

This is because the negative effects of a supply shock on the economy can be significant and long-lasting, while the inflation caused by the supply shock may be temporary and self-correcting. Therefore, policymakers should focus on stimulating the economy in the short run to mitigate the negative effects of the supply shock.

All Other Things Equal, Most Economists Agree That in the Event