Which of the following is an example of a supply shock?
A. a surprise increase of the money supply
B. an increase in government spending
C. a sharp increase in the price of oil
D. an increase in the price level
Answer: C
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The figure above shows Ronald's budget line. He has a weekly income of $20, which he spends on hotdogs and hamburgers. Ronald's real income in terms of hamburgers ________
A) depends on the quantity of hamburgers consumed B) depends on the quantity of hotdogs consumed C) is $20 D) is 10 hamburgers
Normative economic statements
a. can’t be verified. b. deal with “what is”. c. consider the effect one variable has on another variable . d. None of these.
If the Fed's goal is to keep the interest rate fixed, a contractionary fiscal policy must be accompanied by ________ monetary policy that shifts the LM curve to the ________
A) an expansionary, right B) an expansionary, left C) a contractionary, right D) a contractionary, left
In the aggregate demand-aggregate supply model, if entrepreneurs become convinced that future profitability of capital has increased,
A) current output will fall, but the price level will rise. B) current output will rise, but the price level will fall. C) current output and the price level will both rise. D) current output and the price level will both fall.