A temporary decrease in the price of oil would be considered a:
A. long-run supply shock.
B. demand shock.
C. short-run supply shock.
D. The changing price of oil would not affect any of these.
Answer: C
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When the actual unemployment rate is greater than the NAIRU, the inflation rate
A) remains unchanged. B) tends to increase. C) falls to zero. D) tends to decrease.
As a component of GDP, consumption expenditures refers to purchases by consumers of currently produced goods and services
Indicate whether the statement is true or false
In the long run, the exchange rate between two currencies is
A) fixed. B) influenced by purchasing power parity. C) undefined. D) constant. E) determined so that the current account balance equals zero.
Briefly summarize the empirical literature on the long-run costs typically incurred by firms in a variety of industries. In particular, is there reason to believe that firms' long-run cost curves assume the typical U-shape? Why or why not?
What will be an ideal response?