The Short-Run Effect of a Negative Supply Shock Is

question 8

Multiple Choice

The short-run effect of a negative supply shock is

• A) lower inflation and a declining output gap.
• B) lower inflation and an increasing output gap.
• C) higher inflation and a declining output gap.
• D) higher inflation and an increasing output gap.

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Definitions:

B.F. Skinner

An American psychologist and behaviorist known for his theory of operant conditioning and studies on reinforcement.

S-R Association

A concept in behaviorism that refers to the association formed between a stimulus and the response it generates without requiring conscious thought.

Carol Dweck

A psychologist known for her work on the mindset psychological trait, particularly fixed and growth mindsets.

Information-Processing

A cognitive approach that likens human thought to the way computers process information, emphasizing the ways we take in, use, and store information.