This statement is false. Because during inflation , monetary authority will increase interest rate to reduce money supply. Money supply and price level would be higher if an economy faces inflationary pressures. Rate of interest should be increased to reduce investment level in the economy. Because cost of borrowing will be higher due to high interest rate. Commercial bank will provide loans at higher rate of interest rate. Central bank will increase bank rate. Bank rate is the rate of interest charged by Central bank while providing financial accommodations to commercial banks So the commercial bank has to give higher rate of interest for the financial accommodation provided by the Central bank. So it will reduces financial reserve of commercial banks. So they will charges greater rate of interest for providing loans. If central bank does not increase nominal interest rate when inflation rate increases. Then output level and price level will be rise and money supply rate will also going at increasing rate. It will leads to hyper inflation. It reduce the value of domestic currency. Purchasing power will reduce in the economy

A negative supply shoch reduces the aggregate supply of goods and services in the market. So, the short run aggregate supply curve shifts left. As a result the price level rises indicating higher inflation and reduction in the Real GDP level. Such situation is called STAGFLATION.

The policymakers face the dilemma of either increasing the Real GDP level or reducing the inflation. If the increase the aggregate demand through expansionary monetary or fiscal policy, then price leve will further increase worsening the situation.

So, the policymakers will only be able to focus either on inflation or employment and not both.

Answer - $30000

Explaination -

Accounting profit = Total Revenue - Explicit cost

= $100000 - $50000

$50000

Economic Profit = Total Revenue - Explicit cost - Implicit cost

= $100000 - $50000 - $30000

= $20000

Difference = $50000 - $20000

= $30000