Suppose OPEC is unable to come to an agreement regarding oil production and as a result the price of oil drops. Which of the following would you expect to occur as a result of this favorable supply shock?
A) The short-run Phillips curve will shift to the right and the unemployment rate will increase.
B) The short-run Phillips curve will shift to the right and the unemployment rate will decrease.
C) The short-run Phillips curve will shift to the left and the unemployment rate will increase.
D) The short-run Phillips curve will shift to the left and the unemployment rate will decrease.
Correct Answer:
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Q197: A politician blames the Federal Reserve for
Q198: Figure 35-5 Q199: An adverse supply shock causes inflation to Q200: If the unemployment rate is below the Q201: A shock increases the costs of production. Q203: If a central bank attempts to lower Q204: Scenario 35-1 Q205: If the Fed reduces inflation 1 percentage Q206: Scenario 35-1 Q207: Proponents of rational expectations argued that the
A)rise
Suppose that in the first half
Suppose that in the first half
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