By itself, a supply shock such as a hike in the price of oil, can
A. cause real GDP to permanently decrease year after year.
B. not cause inflation.
C. be inflationary as long as there is no policy response.
D. cause a wage-price spiral.
Answer:B
By itself, a supply shock such as a hike in the price of oil, can
A. cause real GDP to permanently decrease year after year. B. not cause inflation. C. be inflationary as long as there is no policy response. D. cause a wage-price spiral.