How does a positive real shock affect real growth and inflation rates if the cen

Question

How does a positive real shock affect real growth and inflation rates if the central bank keeps AD fixed? Real growth rate increases and inflation rate decreases. Real growth rate increases and inflation rate increases. Real growth rate decreases and inflation rate decreases. Real growth rate decreases and inflation rate increases. How does a positive real shock affect real growth and inflation rates if the central bank keeps AD fixed? Real growth rate increases and inflation rate decreases. Real growth rate increases and inflation rate increases. Real growth rate decreases and inflation rate decreases. Real growth rate decreases and inflation rate increases.

Explanation / Answer

Positive real shock shifts AS curve rightwards causing increase in output and decrease in price level.

So, Real growth rate increases and inflation rate decreases.

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