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Often, more than one kind of shock hits the economy at once. When this happens, the different shocks could push price level or real GDP
Often, more than one kind of shock hits the economy at once. When this happens, the different shocks could push price level or real GDP in different directions in the short run, leaving the final short-run result, within an AS-AD framework, ambiguous. Graphically, show how the following shocks will affect the economy. Keeping in mind that the graph only shows one possibility, in general what will happen to inflation and the real GDP in a situation like this: will they rise, fall, or is it hard to say with the information given?
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