effects on costs of production, or production events that have real output effec
ID: 1129442 • Letter: E
Question
effects on costs of production, or production events that have real output effects conflict begins in the Middle East involving several oil producing countries, what would this have on the U.S. economy in the short run? b. Aggregate demand would increase d. Aggregate supply would decrease no change in aggregate supply, the price level will and real GDP wil in the short run. b. Increase; decrease decrease d. Decrease; increase no change in aggregate demand, the price level wil 28.IM and real GDP will in the short run. a. Increase; increase b. Increase; decrease c. Decrease; decrease d. Decrease; increase 29. If an economy is experiencing demand-side inflation, and ope operating above the natural rate of output, which of the following actions would pressures? be most appropriate to reduce the inflationary a. Policies designed to increase aggregate demand b. Policies designed to decrease aggregate supply c. Policies designed to decrease aggregate d emand d. Any of the above would be effective If an economy is experiencing demand-side inflation, and operating above the nat nvestment credits, technology subsidies) have on the economy in the long-run? output, what impact would policies designed to increase long-run aggregate supply (ex. a. Inflation would increase; economic growth would occur; output would increase Inflation would decrease, economic growth would occur output would increase Inflation would increase; economic growth would occur; output would decrease Inflation would decrease; economic growth would occur, output would decreaseExplanation / Answer
24.
Answer: a
Economic growth tends to increase inflation; because it creates expansions, which turns into more earnings. Once people earn more, they also spend more; but in the short-run supply of goods and services are limited. Additional money in the market creates pressure on those existing products, causing inflation. Therefore, the first option is correct.
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