Question 1
Refer to the information provided in Figure 26.6 below to answer the question(s) that follow.
Refer to Figure 26.6. Suppose the equilibrium output is initially $600 billion. A decrease in the
Z factors ________ equilibrium output and ________ the price level.
◦ decreases; leaves unchanged
◦ leaves unchanged; increases
◦ increases; increases
◦ increases; decreases
Question 2
Refer to the information provided in Figure 26.6 below to answer the question(s) that follow.
Refer to Figure 26.6. Suppose the equilibrium output is initially $600 billion. An oil embargo would probably
◦ increase both the equilibrium output and the price level.
◦ decrease the equilibrium output and increase the price level.
◦ increase the equilibrium output and decrease the price level.
◦ decrease both the equilibrium output and the price level.
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