According to aggregate demand and supply analysis,the favorable supply shock of 1995-1999 had the effect of
A)increasing aggregate output,lowering unemployment,and raising inflation.
B)decreasing aggregate output,raising unemployment,and raising inflation.
C)increasing aggregate output,lowering unemployment,and lowering inflation.
D)decreasing aggregate output,raising unemployment,and lowering inflation.

Question

Quizplus · Accepted Answer

The favorable supply shock of 1995-1999 would have led to an increase in aggregate supply, which would shift the aggregate supply curve to the right. As a result, aggregate output would increase, unemployment would decrease, and inflation would lower. Therefore, choice C is the correct answer.

According to Aggregate Demand and Supply Analysis,the Favorable Supply Shock