Solved

An Important Limitation of the AD-AS Model Is That It

Question 102

Multiple Choice

An important limitation of the AD-AS model is that it predicts that a collapse in oil prices would result in a fall in the general price level.But the experience of many countries in the late 1980s clearly demonstrated that,when oil prices fall,the overall price level keeps ___________ but at a ___________ pace.That is,the ___________ falls,but not the price level.


A) rising;slower;inflation rate
B) rising;faster;inflation rate
C) falling;slower;inflation rate
D) rising;slower;unemployment rate
E) falling;faster;inflation rate

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents