When a Shock Is Amplified,a Mild _____ Shock Is Transformed

question 102

Multiple Choice

When a shock is amplified,a mild _____ shock is transformed into _____.

• A) negative;a mild positive shock
• B) negative;an economic boom
• C) negative;a more serious reduction in output
• D) positive;a mild negative shock

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Definitions:

Short-run Phillips Curve

A graphical representation that shows the inverse relationship between the rate of inflation and the rate of unemployment in an economy over a short period.

Farthest from Origin

In geometric terms, the point on a graph that is at the greatest distance from the origin, often used metaphorically to describe extreme or outlier conditions.

Phillips Curve Analysis

An economic concept that analyzes the inverse relationship between rates of unemployment and corresponding rates of inflation.

Natural Rate

The natural rate often refers to the natural rate of unemployment, which is the level of unemployment consistent with sustainable economic growth, without accelerating inflation.