In 2000, a major U.S. oil company began exploration off the southeastern coast of the United States. Suppose the company discovers huge reserves of natural gas. Using the aggregate demand/ aggregate supply model, predict what shifts will occur and what will happen to output and prices in both the long and short runs
The discovery of natural gas reserves will increase the resources that the economy has available, which will lead to an increase in both short-run and long-run aggregate supply. In both the long run and the short run, prices will fall and output will increase.
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Evidence from the United States and Japan on "multifactor productivity" shows it to be highly ________, which is ________ with the RBC theory of technological shocks and their consequences for the business cycle
A) procyclical, consistent B) procyclical, inconsistent C) countercyclical, consistent D) countercyclical, inconsistent
If the economy is operating at an unemployment rate above the full employment rate,
a. actual output is above potential output b. actual output is below potential output c. frictional unemployment has been eliminated d. structural unemployment has been eliminated e. actual output equals potential output
When the economy is in equilibrium, there will be no unemployment or inflation
Indicate whether the statement is true or false
In which of the following instances would the deadweight loss of the tax on airline tickets increase by a factor of 9?
a. The tax on airline tickets increases from $20 per ticket to $60 per ticket. b. The tax on airline tickets increases from $20 per ticket to $90 per ticket. c. The tax on airline tickets increases from $15 per ticket to $60 per ticket. d. The tax on airline tickets increases from $15 per ticket to $135 per ticket.