Sun 9:47 p ECO 2013 -01S Intro Macro Summer 2018 Cinthya Ruvalcaba & 7/29/18 9:4

Question

Sun 9:47 p ECO 2013 -01S Intro Macro Summer 2018 Cinthya Ruvalcaba & 7/29/18 9:47 PM Quiz: Quiz #2 Time Remalning: 01:54:28 Submit Quiz e This Question: 1 pt This Quiz: 25 pts possible Assume that the economy is in long-run equilibrium Now, assume that there is an unexpected increase in the price of oil As a result of higher oil prices, the ss O A. short-run aggregate supply curve will shift right. O B. short-run aggregate supply curve will shift left O C. aggregate demand curve will shift left er O D. long-run aggregate supply curve will shift left. The new short-run equilibrium will be n: OA where the new short-run aggregate supply curve intersects the original aggregate the original aggregate demand curve. O B. where the original short-run aggregate supply curve in new short-run aggregate supply curve, the original aggregate demand curve, and a new long-run aggregate supply curve intersect new short-run aggregate supply curve, the original aggregate demand curve, and original long-run aggregate supply curve intersect. of O D. where the a C Which of the following best explains how and why the economy wil ad ust back to Ingrun equirium?

Explanation / Answer

Q.1 Option B. When the price increases the SRAS decreases which shifts the curve to left
Q.2 Option A. It is at the intersection of SRAS and original demand curve
The unemployment rate is below the unemployment rate in the initial equilibrium prior to increase in the price of Oil
Q.3 Option C. The economy would adjust to higher prices which make the workers to get higher pay, increase production and adjust to long run equilibrium
Q.4 Option A
Q5. Option B

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