Suppose that the economy experiences an adverse supply shock. We can conclude that:

Name: Suppose that the economy experiences an adverse supply shock. We can conclude that:
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An adverse supply shock, such as an increase in oil prices, typically raises the costs of production for firms across various sectors, leading to higher prices for goods and services at every level of output. This does not necessarily increase aggregate employment, lower general price levels, or increase aggregate demand.

Suppose That the Economy Experiences an Adverse Supply Shock