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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For how long does a patent give a firm the exclusive legal right to a product?
A) 10 years B) 17 years C) 20 years D) 50 years
Productive efficiency means producing without:
a. cost. b. wages. c. waste. d. competition.
Some economists believe that policy makers should avoid stabilization policy because
a. lags make the policy impact unpredictable. b. no tax cut ever stimulated demand. c. stabilization policies are rarely signed into law. d. it never works.
Explain the mainstream economists’ justification for the use of discretionary fiscal and monetary policy and their criticisms of policy rules.
What will be an ideal response?