Which of the following is true?
A)Inflation and unemployment rates can both increase in the short run in response to positive supply shocks.
B)Inflation and unemployment rates can both decrease in the short run in response to reduced aggregate demand.
C)Inflation and unemployment rates can both decrease in the short run in response to negative supply shocks.
D)None of the above.

Question

Which of the following is true?​
A)​Inflation and unemployment rates can both increase in the short run in response to positive supply shocks.
B)​Inflation and unemployment rates can both decrease in the short run in response to reduced aggregate demand.
C)​Inflation and unemployment rates can both decrease in the short run in response to negative supply shocks.
D)None of the above.

Quizplus · Accepted Answer

In the short run, positive supply shocks typically decrease inflation and unemployment, while reduced aggregate demand usually increases unemployment and decreases inflation. Negative supply shocks often increase inflation and unemployment.

Which of the Following Is True?​

Which of the Following Is True?