A positive AD supply shock will result in
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What is the best-case scenario for the Fed?
1. counter a positive real shock
2. counter a negative real shock
3. counter a negative AD shock
4. counter a positive SRAS shock
Suppose that the economy is currently at potential output. Also suppose that you are an economic policy maker and that a college economics student asks you to rank, if possible, your most preferred to least preferred type of shock: positive demand shock, negative demand shock, positive supply shock, negative supply shock. How would you rank them and WHY?
