What is the main difference between a temporary and permanently negative supply shock?
A) The real interest rate immediately decreases after a temporary shock while it eventually increases after a permanent shock.
B) Output increases right away after a temporary shock but the impact does not last whereas for a permanent shock output permanently decreases.
C) A temporary shock will see a permanent increase in inflation while inflation will only rise temporarily after a permanent shock.
D) all of the above
E) none of the above
E
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Suppose there is a temporary increase in the price of oil. This is represented by
A) a leftward shift of the SAS and the LAS curve. B) a leftward shift of the LAS curve. C) a rightward shift of the SAS curve. D) a leftward shift of the SAS curve.
In the figure above, the price of bonds would fall from P1 to P2 when
A) inflation is expected to increase in the future. B) interest rates are expected to fall in the future. C) the expected return on bonds relative to other assets is expected to increase in the future. D) the riskiness of bonds falls relative to other assets.
The decline of the full-service wholesale houses CANNOT be traced to
a. competition from the marketing departments of large manufacturers. b. many industries adopting the "continuous process" manufacturing. c. the rise of brand identity. d. All of the above are correct. e. Only a and c are correct.
The international organization that replaced the General Agreement on Tariffs and Trade (GATT) is the
a. World Bank. b. Export-Import Bank. c. World Trade Organization. d. International Monetary Fund.