Starting from Long-Run Equilibrium, an Adverse Inflation Shock Results in a Short-Run

question 32

Multiple Choice

Starting from long-run equilibrium, an adverse inflation shock results in a short-run equilibrium with ________ inflation and ________ output.

• A)higher; higher
• B)higher; lower
• C)higher; potential
• D)lower; lower

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Definitions:

Overdrive Ratios

In transmissions, a gear ratio that results in the drive shaft rotating faster than the engine's crankshaft, improving fuel efficiency.

6-speed World Transmission

A type of transmission with six forward gears, designed for optimized fuel efficiency and performance in vehicles.

Ranges

In the context of appliances, refers to kitchen stoves that combine a cooktop with an oven; in broader use, can mean a variety of distances or scopes.

Forecasting Risk

The potential for actual outcomes to vary significantly from the predictions or expectations due to changes in variables or conditions.