Answered

At Westonci.ca, we make it easy for you to get the answers you need from a community of knowledgeable individuals. Get the answers you need quickly and accurately from a dedicated community of experts on our Q&A platform. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

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 hope this was helpful. Please come back whenever you need more information or answers to your queries. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.