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27-05-2023
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Some economists thought that the coronavirus were going to generate a STRONGER demand shock (negative a) than supply shock (positive ō) in 2020. If that had been the case what should we have seen happen to inflation and output? Inflation going UP and output staying at potential. Inflation going down and output increasing above potential. O Inflation going UP and output dropping below potential. Inflation going up and output increasing above potential. Inflation going DOWN and output staying at potential. Inflation going DOWN and output dropping below potential.

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