Which of the following would be represented by a positive value of the random supply shock, υ ?
T
A)an irrational wave of optimism among investors
B)an increase in government spending
C)widespread drought leading to large increases in food prices
D)an increase in the central bank's inflation target

Question

Quizplus · Accepted Answer

A positive value of the random supply shock, υ, typically represents an adverse supply shock, such as a widespread drought leading to large increases in food prices.

Which of the Following Would Be Represented by a Positive