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Suppose the Economy Is Initially in Long-Run Equilibrium

question 71

Multiple Choice

Suppose the economy is initially in long-run equilibrium. Now suppose oil prices rise sharply and at the same time, policymakers pursue expansionary monetary and fiscal policies. Which of the following will occur as a result of these two events, given that supply-side effects dominate demand-side effects?


Definitions:

Title

A legal term referring to the rightful ownership of property, including the rights to use, sell, or lease it.

Paid

The state of having received money or compensation for services or goods.

Requirement of Writing

A legal principle that certain types of contracts or agreements must be in writing to be legally enforceable.

Sale of Goods Act

A legal framework that regulates the sale and purchase of goods, ensuring certain standards and rights are maintained between buyers and sellers.

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