In the short run,a negative real shock will cause output growth to:
A) increase.
B) decrease.
C) remain unchanged.
D) become more difficult to predict.

Question

Quizplus · Accepted Answer

A negative real shock, such as a decrease in consumer spending, will cause a decrease in output growth in the short run as businesses may cut back on production and lay off workers. It is unlikely to cause an increase or remain unchanged. While the shock may make output growth more difficult to predict, that is not among the answer choices provided.

In the Short Run,a Negative Real Shock Will Cause Output