Suppose there is an oil supply shock to the U.S. economy due to an embargo by major oil producing nations. According to the real business cycle theory, the supply shock will, other things being equal
A) cause economy-wide deflation.
B) cause real Gross Domestic Product (GDP) to decline both in the short run and in the long run.
C) push the economy into an expansionary phase of the business cycle.
D) push real Gross Domestic Product (GDP) upward in the short run but downward in the long run.
B
You might also like to view...
Holding other factors constant, if the retirement of many in people in the post-war baby boom generation reduces the portion of the population is the labor force, then the real wages of workers will ________ and employment of workers will ________.
A. increase; increase B. decrease; not change C. decrease; increase D. increase; decrease
In the above figure, a recession begins at point ________ and an expansion begins at point ________
A) a; b B) b; c C) b; a D) d; c
The division of the burden of a tax between buyers and sellers in a market is called tax allocation
Indicate whether the statement is true or false
Price elasticity of supply is a measure of the relative responsiveness of the change in price to a change in quantity supplied
a. True b. False Indicate whether the statement is true or false