A Negative Shock to the Long-Run Aggregate Supply Curve Will

question 22

Multiple Choice

A negative shock to the long-run aggregate supply curve will cause:

• A) both real growth and inflation to fall.
• B) both real growth and inflation to rise.
• C) real growth to fall, but the inflation rate will rise.
• D) real growth to rise, but the inflation rate will fall.

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Definitions:

Equity Method

An accounting technique used by a company to record investments in other companies where it has significant influence but does not have full control.

Consolidated Financial Statements

Financial statements that combine the financial information of a parent company with its subsidiaries to present a single set of statements for the entire group.

FVTPL

Fair Value Through Profit or Loss, an accounting strategy whereby financial assets are valued at their current market price, with changes in fair value recorded in the profit or loss statement.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but not complete control.