By itself, a supply shock such as an increase in the price of oil, will
A) cause real GDP to permanently decrease year after year.
B) not cause inflation if there is no policy response.
C) be inflationary as long as there is no policy response.
D) cause a wage-price spiral.

Question

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The Answer of By itself, a supply shock such as an increase in the price of oil, will
A) cause real GDP to permanently decrease year after year.
B) not cause inflation if there is no policy response.
C) be inflationary as long as there is no policy response.
D) cause a wage-price spiral.

By Itself, a Supply Shock Such as an Increase in the Price