An adverse supply shock shifts the short-run Phillips curve right and the short-run aggregate-supply curve left.

Question

BlackTom AI · Accepted Answer

An adverse supply shock reduces aggregate output capacity and raises firms' costs, so the short-run aggregate supply (SRAS) curve shifts left and the short-run Phillips curve (SRPC) shifts right (higher inflation for any given unemployment). 1. Relevant knowledge points and concepts - SRAS: a leftward shift means at each price level firms supply less output (cost-push shock, e.g., oil price spike). - Phillips curve (short run): an inverse relationship between inflation and unemployment for given inflation expectations. A supply shock that raises both inflation and unemployment shifts the SRPC up/right. - Distinction: demand shocks move along the SRPC; supply shocks shift the SRPC. 2. Step-by-step reasoning - Start at initial equilibrium (output Y0, price level P0, inflation π0, unemployment u0). - Adverse supply shock (higher input costs) lowers SRAS → SRAS_left. Immediate effects: output falls (ΔY < 0) and unemployment rises (Δu > 0); price level rises (ΔP > 0) producing higher inflation (Δπ > 0). - Because inflation increases while unemployment increases, the whole short-run inflation–unemployment relationship changes: for any given unemployment rate, observed inflation is now higher. - Graphically, that is a rightward/upward shift of the SRPC. 3. Intermediate steps/calculations - No numerical values required: qualitative signs suffice: SRAS: ΔY < 0, ΔP > 0; Phillips relation: Δπ > 0 and Δu > 0 imply SRPC shifts right. 4. Why the correct answer is correct - The leftward SRAS shift generates cost-push inflation and higher unemployment simultaneously; this outcome cannot be represented as a movement along the original SRPC, so the SRPC itself must shift right (higher inflation at each unemployment). 5. Why the other option (False) is incorrect - Claiming False would imply the supply shock does not shift one or both curves. That contradicts the standard macro result: adverse supply shocks shift SRAS left and the SRPC right. 6. Conclusion - Therefore the statement is True, matching the provided answer.

An adverse supply shock shifts the short-run Phillips curve right and the short-run aggregate-supply curve left.单项选择题

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