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
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In July 2014, the CPI inflation rate was 0.3 percent while the core CPI inflation rate was 0.1 percent. The difference between these two measurements of inflation indicates
A) prices for food and fuel were increasing more rapidly than prices for other goods. B) prices for food and fuel were increasing less rapidly than prices for other goods. C) the underlying inflation rate was higher than the overall inflation rate. D) a negative underlying inflation rate.
What best describes westward movement of population between 1800-1860?
a. The 1850s was the decade when the largest number of people moved to the west. b. The large increase in and sales in this period was based on speculation. c. Migrants moved to the west because they were "pushed" out of the east, where conditions were getting worse. d. Corn prices were relatively low in the decades when migration to the west was largest.
When taxes or subsidies on a particular product are introduced into the general equilibrium model we can be sure that
A. subsidies make the product appear too cheap to its producer. B. we get too much of the subsidized product and too little of the taxed product. C. a more fair allocation of resources is possible. D. taxes make the taxed product appear too expensive to its producer.
A business cycle is the:
A. period of time in which expansion and contraction of economic activity are equal. B. period of time in which there are three phases: peak, depression, and recovery. C. recurring growth and decline in real GDP. D. period of time in which a business is established and ceases operations.