Author Question: Suppose an economy is initially in long-run equilibrium and it then experiences a supply shock in ... (Read 45 times)

fbq8i

  • Hero Member
  • *****
  • Posts: 527
Suppose an economy is initially in long-run equilibrium and it then experiences a supply shock in the form of exceptionally high energy prices. Which of these will be true in this economy?
 a. The short-run aggregate supply curve will shift leftward, and the long-run supply curve will shift rightward.
  b. The short-run aggregate supply curve and the long-run supply curve will shift rightward.
 c. The short-run aggregate supply curve will not shift, and the long-run aggregate supply curve will shift rightward.
  d. The short-run aggregate supply curve will shift rightward, but the long-run aggregate supply curve will not shift.
  e. The short-run aggregate supply curve and the long-run supply curve will shift leftward.

Question 2

In the long run, an expansionary monetary policy will lead to:
 a. a decrease in aggregate expenditure.
  b. an increase in unemployment.
 c. an increase in the price level.
 d. an increase in potential output.
 e. a decrease in the price level.



b614102004

  • Sr. Member
  • ****
  • Posts: 320
Answer to Question 1

e

Answer to Question 2

c



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

About 600,000 particles of skin are shed every hour by each human. If you live to age 70 years, you have shed 105 pounds of dead skin.

Did you know?

Certain topical medications such as clotrimazole and betamethasone are not approved for use in children younger than 12 years of age. They must be used very cautiously, as directed by a doctor, to treat any child. Children have a much greater response to topical steroid medications.

Did you know?

In the ancient and medieval periods, dysentery killed about ? of all babies before they reach 12 months of age. The disease was transferred through contaminated drinking water, because there was no way to adequately dispose of sewage, which contaminated the water.

Did you know?

Pubic lice (crabs) are usually spread through sexual contact. You cannot catch them by using a public toilet.

Did you know?

The eye muscles are the most active muscles in the whole body. The external muscles that move the eyes are the strongest muscles in the human body for the job they have to do. They are 100 times more powerful than they need to be.

For a complete list of videos, visit our video library