Question: 1.8. a. What does a negative real shock do to inflation: Does it rise, fall, or remain unchanged? b. What does a negative real shock

1.8.

a. What does a negative real shock do to inflation: Does it rise, fall, or remain unchanged?

b. What does a negative real shock do to spending growth: Does it rise, fall, or remain unchanged?

c. What does a fall in spending growth, that is, a shift inward of the AD curve, do to real growth: Does it rise, fall, or remain unchanged?

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