Concept Introduction:
Inflation: When the price of any good increases continuously for an interval of time it is called inflation.
Natural Rate of Unemployment: It is a rate of unemployment when the real rate of output is equal to the potential output in the economy. At such a point the economy does not have a recessionary or inflationary gap.
Supply Shock: In every economy, it is a type of sudden event that leads to a change in the supply of output for a short period of time. Supply may decrease or increase depending upon the type of shock.
Negative Supply Shock: It is a type of shock in which the
Disinflation: The act of reducing inflation is known as disinflation. It has a huge cost on an economy as it creates a huge unemployment and lowers the real GDP.
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