Multiple Choice
Suppose the economy is initially in long-run equilibrium. Then suppose there is a drought that destroys much of the wheat crop. According to the model of aggregate demand and aggregate supply, what happens to prices and output in the short run?
A) Prices rise; output falls.
B) Prices fall; output rises.
C) Prices rise; output rises.
D) Prices fall; output falls.
Correct Answer:
Verified
Correct Answer:
Verified
Q23: Which of the following will reduce the
Q24: According to the model of aggregate supply
Q25: Explain the short-run and long-run effects on
Q26: In the model of aggregate demand and
Q28: Investment is a particularly volatile component of
Q29: Suppose the price level falls but because
Q32: Stagflation occurs when the economy experiences<br>A) rising
Q145: Make a list of things that would
Q343: Which of the following is most commonly
Q374: Which of the following is correct?<br>A)Short run