In the Short Run,a Negative AD Shock Will Cause the Inflation

question 150

Multiple Choice

In the short run,a negative AD shock will cause the inflation rate to:

• A) increase.
• B) decrease.
• C) remain unchanged.
• D) become more volatile.

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Definitions:

Excess Supply

A scenario in which the market has a supply of a product or service that exceeds the demand for it at its present price.

Quantity Demanded

The total amount of a product or service that consumers are willing to buy at a given price over a specified period.

Price Sunglasses

The amount of money required to purchase eyewear designed to protect the eyes from the sun's harmful rays.

Market Equilibrium

The condition in a market where the quantity supplied equals the quantity demanded, resulting in no surplus or shortage and stable prices.