A temporary negative supply shock ________ real interest rates and ________ output in the short run, thereby its effect on stock prices is ________
A) raises; lowers; negative
B) raises; raises; ambiguous
C) lowers; raises; negative
D) lowers; raises; positive
A
You might also like to view...
How are the following events likely to affect the market supply of rice in an economy?
a) A fall in the wage rate of farm labor b) An increase in the productivity of farm capital due to better technology c) An increase in the use of agricultural land for non-agricultural purposes
In the long run, monopolistically competitive firms are ________ to perfectly competitive firms because ________
A) similar; both firms produce at the minimum ATC B) similar; both firms make zero economic profit C) not similar; monopolistically competitive firms set P = MC to maximize profits D) not similar; monopolistically competitive firms can make an economic profit and perfectly competitive firms cannot
The increase in government spending on unemployment insurance payments to workers who lose their jobs during a recession and the decrease in government spending on unemployment insurance payments to workers during an expansion is an example of
A) discretionary monetary policy. B) automatic stabilizers. C) automatic monetary policy. D) discretionary fiscal policy.
The profit-maximizing firm should lay off workers when: a. MRC < MRP
b. MRC > MRP. c. MRC = MRP. d. the MP of labor begins to diminish.