Answer:
Output will be lower
Explanation:
Supply shock is an economic event that occurs because of sudden changes in the supply of goods and services within an economy.
A negative supply shock will shift the SRAS to the left and it will increase the price of the good and decrease the quantity, the new equilibrium will be at lower output and higher inflation.
When the economy suffers a permanent negative supply shock, the supply may keep on increasing or decreasing rapidly.
If the central bank does not respond by changing the autonomous component of monetary policy, then the output will be lower.
This is because permanent supply shock will lead to higher prices which disrupts the production and hence the output falls.
Answer:
Lowering interest rate.
Explanation:
When the FED lower the interest rate to banks, they obtain extra capital that can be invested in new businesses, offer more loans that will increase the money supply in the market.
Answer:
Option C Policies designed to increase efficiency may decrease equity.
Explanation:
The reason is that the company if the company wants to increase its efficiency then it will have to invest in the operations that will increase its efficiency. This investment will come from raising finance either from the issuance of shares or borrowing money. So this means policies designed to increase efficiency requires investment so the option C is what the explanation is saying.
D.a trade deficit
When the value of a country's exports exceed the value of its imports, the country is experiencing:a trade deficit
