Question

In: Economics

Please match each of the characteristics to the situation with which they are most associated.

Positive demand shock Negative demand shock Positive supply shock Negative supply shock

Answer Bank

a negative shift that leads to a lower aggregate price

a positive shift that leads to a lower aggregate price

SRAS curve shifts to the right

AD curve shifts to the left

SRAS curve shifts to the left

AD curve shifts to the right

a positive shift that leads to a higher aggregate price

a negative shift that leads to a higher aggregate price

stagflation

Expert Solution

a) Postive demand shock are :

AD curve shift to the right
A postive shift that lead to a higher aggregate price

b) Negative demadn shock are:

A negative shift that will lower the aggregate price,
Ad curve shift to the left,

c) Positive supply shock:

SRAS shift to the right.
A positive shift that lower the aggregate price.

d) negative supply shock

SRAS shift to the left and STagflation

Rahul Sunny answered 2 years ago

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