Answered

Expand your knowledge base with the help of IDNLearn.com's extensive answer archive. Discover comprehensive answers from knowledgeable members of our community, covering a wide range of topics to meet all your informational needs.

Describe how changes in expected inflation impact an economy in the wake of a temporary negative supply shock

Sagot :

Abhaydwive123idn

Negative shocks reduce production and increase unemployment. Positive shocks increase production and reduce unemployment.

Unexpected change moving SRAS. A positive supply shock increases SRAS, whereas a negative supply shock decreases SRAS. A combination of slowing overall economic output (declining) and rising price levels (inflation). Stagnation occurs when SRAS decreases.

A negative supply shock leads to an increase in the natural rate of interest. If real interest rates are not adjusted, there will be excess demand in the labor market. t = 0 unless the real interest rate is adjusted. Then we move into an economy where the market is imperfect.

A supply shock is an unexpected event in which the supply of a product or commodity changes, causing a sudden change in price. A positive supply shock increases output and decreases prices, while a negative supply shock decreases output and increases prices.

Learn more about supply at

https://brainly.com/question/25843620

#SPJ4

Your participation means a lot to us. Keep sharing information and solutions. This community grows thanks to the amazing contributions from members like you. Your search for solutions ends at IDNLearn.com. Thank you for visiting, and we look forward to helping you again.