Negative Supply Shocks Cause Shifts In

question 63

Multiple Choice

Negative supply shocks cause shifts in:

• A) only the short-run aggregate supply curve.
• B) the dynamic aggregate demand curve.
• C) the monetary policy reaction curve but only if policymakers do not change their inflation target.
• D) the short-run aggregate supply curve and, possibly, the long-run aggregate supply curve.

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Definitions:

Market System

In this economic order, the strategies for investment, production, and merchandise distribution are dictated by supply and demand trends, with a free-market policy guiding the pricing of all goods and services.

Economic Systems

The means by which countries or communities organize and distribute available resources, goods, and services across the economy.

North Korea

North Korea is a country in East Asia, officially known as the Democratic People's Republic of Korea, known for its authoritarian government and isolation from most of the international community.

South Korea

A country located in East Asia, known for its advanced technology sector, vibrant culture, and strong economy.