You are an economic detective. Using the three clues provided, explain what kind of shock the economy most likely experienced. Further explain what curve in the Fed model was affected and in which direction the curve shifted.
- The real interest rate and output gap remain unchanged.
- The economy is in a recession.
- Actual inflation has increased.

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The Answer of You are an economic detective. Using the three clues provided, explain what kind of shock the economy most likely experienced. Further explain what curve in the Fed model was affected and in which direction the curve shifted.
- The real interest rate and output gap remain unchanged.
- The economy is in a recession.
- Actual inflation has increased.

You Are an Economic Detective