We Would Expect a Negative Real Shock, Such as a Severe

question 11

Multiple Choice

We would expect a negative real shock, such as a severe countrywide drought, to result in:

• A) a decrease in the inflation rate and an increase in the growth rate of output.
• B) a decrease in the inflation rate and a decrease in the growth rate of output.
• C) an increase in the inflation rate and an increase in the growth rate of output.
• D) an increase in the inflation rate and a decrease in the growth rate of output.

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