A consequence of the permanent income hypothesis is that: 0 Investment tends to be a smooth component of GDP. 0 Consumption tends to grow primarily with potential GDP. 0 Exports and imports even out. 0 Consumers would rather not save, but spend all their earnings at the rst opportunity. Some economists thought that the coronavirus were going to generate a STRONGER demand shock (negative a) than supply shock (positive o) in 2020. If that had been the case what should we have seen happen to inflation and output? O Inflation going UP and output dropping below potential. O Inflation going DOWN and output dropping below potential. O Inflation going UP and output staying at potential. O Inflation going DOWN and output staying at potential. O Inflation going up and output increasing above potential. O Inflation going down and output increasing above potential