An inflation shock is Multiple Choice the level of inflation consistent with output in a recessionary gap. the level of inflation consistent with output in an expansionary gap. a change in the inflation rate generated by excessive aggregate spending. a sudden change in the normal behavior of inflation, unrelated to the nation's output gap.

Which of the following is an example of a production quota? a. the government sets an upper limit on the quantity that each dairy farmer can produce. b. the government sets a price floor in the market for dairy products. c. the government sets a lower limit on the quantity that each dairy farmer can produce. d. the government guarantees to buy a specified quantity of dairy products from farmers.