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Starting from Long-Run Equilibrium, the Long-Run Impact(s)of a Sharp Drop

Question 39

Multiple Choice

Starting from long-run equilibrium, the long-run impact(s) of a sharp drop in oil prices, compared to the original equilibrium, is(are) :


A) higher inflation and the same output.
B) lower inflation and lower output.
C) the same inflation and the same output.
D) higher inflation and lower output.

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