Often, more than one kind of shock hits the economy at once. When this happens, the different
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Question:
Often, more than one kind of shock hits the economy at once. When this happens, the different shockscouldpush inflation (or real growth) in different directions in the short run, leaving the final short-run result ambiguous. What is most likely to happen to inflation and real output growth in the following cases: Will they rise or fall, or can't you tell with the information given?
A- A nation's scientists invent many new Internet search tools, raising current productivity and making investors optimistic about future inventions as well.
B- A government raises taxes and its economy experiences a year of excellent weather for growing crops.
C- Oil prices skyrocket and the central bank slows the rate of money growth.
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