What Is the Effect of an Adverse Supply Shock

question 79

Multiple Choice

What is the effect of an adverse supply shock?

• A) The long-run aggregate supply curve shifts to the left.
• B) The short-run aggregate supply curve shifts to the right.
• C) The long-run Phillips curve shifts to the left.
• D) The short-run Phillips curve shifts to the right.

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Definitions:

Legally Sufficient Value

A value, consideration, or benefit that is recognized by law as adequate to support a binding contract.

Preexisting Duty

An obligation or duty that already exists under a contract, and performing it, therefore, does not constitute consideration for a new promise.

Law

Rules devised and applied by institutions of society or the government to modulate behavior.

Legally Sufficient Value

An acceptable form or measure of value that must be provided in a contract to make it binding and enforceable under law.