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A Supply Shock,such as the OPEC Oil-Price Increases in the 1970s

Question 45

Multiple Choice

A supply shock,such as the OPEC oil-price increases in the 1970s,


A) can lead to accelerating inflation,if an accommodation policy tries to maintain the pre-shock level of real GDP.
B) will cause lower real wages in long-run equilibrium.
C) will reduce the natural level of real GDP.
D) both B and C

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