Answered

Westonci.ca is the ultimate Q&A platform, offering detailed and reliable answers from a knowledgeable community. Get quick and reliable solutions to your questions from a community of experienced professionals on our platform. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

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

Sagot :

abhaydwive123

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

Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.