Multiple Choice
Suppose the economy is initially in long-run equilibrium.Which of the following events leads to an increase in the price level and a decrease in real GDP in the short run?
A) a decrease in health insurance premiums paid by firms raises the cost of employing labor
B) an increase in government transfer payments
C) an increase in the cost of a key input such as oil
D) a sharp fall in stock market prices
Correct Answer:
Verified
Correct Answer:
Verified
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