Consider an economy where a negative supply shock happens, Business Economics

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Consider an economy where a negative supply shock happens

Consider an economy where a negative supply shock happens. The supply shock is not accommodated by the Fed. Which of the following will be true? None of the listed options is correct. The inflation rate will rise. Output will go higher than its potential level. The Phillips Curve shifts to the left (upward). The Fed will lower the target ffr.

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