If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output.
B. lower price level and lower level of output.
C. higher price level and higher level of output.
D. lower price level and higher level of output.
Answer: A
You might also like to view...
If we are trying to determine if two different products are substitutes, complements, or not related at all, we should find the value of the
A) price elasticity of demand for both goods. B) price elasticity of supply for both goods. C) income elasticity of demand for both goods. D) cross elasticity of demand. E) price elasticity of demand and the price elasticity of supply for both goods.
Approximately how long does it take for the successive increases in spending and output to be completed after an initial increase in investment spending?
a. Two years b. Ten years c. Six years d. One year e. Five years
The money demand curve shifts to the right whenever there is a decrease in the interest rate
a. True b. False Indicate whether the statement is true or false
The choice on a production possibilities set that is socially preferred or the choice on an individual's budget constraint that is personally preferred displays allocative efficiency
a. True b. False Indicate whether the statement is true or false