Multiple Choice
Use the following to answer questions :
Exhibit: Supply Shock
-(Exhibit: Supply Shock) Assume that the economy starts at point A and there is a drought that severely reduces agricultural output in the economy for just one year. In this situation, point ______ represents the short-run equilibrium immediately following the drought and point ______ represents the eventual long-run equilibrium.
A) B; C
B) B; A
C) E; D
D) D; A
Correct Answer:

Verified
Correct Answer:
Verified
Q10: The long run refers to a period:<br>A)
Q11: According to the quantity equation, if the
Q12: Suppose that laws are passed banning labor
Q13: A favorable supply shock occurs when:<br>A) environmental
Q14: When the Federal Reserve increases the money
Q16: The principal method used by the Federal
Q17: Use the following to answer questions :<br>Exhibit:
Q18: What is the relationship between unemployment and
Q19: The short-run aggregate supply curve is horizontal
Q20: A reduction in the demand for money