The price of a barrel of oil doubled between 2007 and the middle of 2008. To make matters worse, a financial crisis hit the U.S. economy starting in August of 2007
Which of the following is an appropriate description of the mechanism that would have ensued? A) The increase in the price of oil would have immediately shifted the AS curve to the right.
B) The financial crisis would have led to a sharp contraction in spending shifting the AD curve to the right.
C) Shifts in both the AD and the AS curve would have ensued in the short-run but as long as neither shock had an impact on potential output, ultimately unemployment will have been unaffected in the long run.
D) All of the above.
E) None of the above.
C
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John has a marginal benefit of $7 for 1 slice of pizza, $5 for a second slice, $3 for a third slice, $1 for a fourth slice, and $0.50 for a fifth slice. The price of pizza is $1.50 per slice. Which of the following statements is correct?
A) John will purchase 3 slices of pizza and have consumer surplus of $10.50. B) John will purchase 4 slices of pizza and have consumer surplus of $12.00. C) John will purchase 2 slices of pizza and have consumer surplus of $1.50. D) John will purchase 3 slices of pizza and have consumer surplus of $4.50. E) John will purchase 2 slices of pizza and have consumer surplus of $3.00.
During an above-full-employment equilibrium, actual GDP is greater than potential GDP
Indicate whether the statement is true or false
Limits on a country's ability to use aid effectively are referred to as its
a. absorptive capacity b. bilateral aid c. conditionality d. grant element e. none of the above
Changes in the composition of demand among industries or regions are called sectoral shifts
a. True b. False Indicate whether the statement is true or false