Aggregate Supply Shocks Are

question 72

Multiple Choice

Aggregate supply shocks are

• A) the results of monetary policy actions.
• B) the results of fiscal policy actions.
• C) the results of structural policy actions.
• D) inflation shocks or shocks to potential output.
• E) abrupt changes in autonomous investment.

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Definitions:

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods, given a set of inputs and technology, assuming efficient use of resources.

Decreasing Opportunity Costs

A situation where the cost of forgoing the next best alternative decreases as more units of a product are produced.

Production Possibility Frontier

A curve depicting the maximum attainable combinations of two or more goods and services that can be produced with available resources and technology.