Suppose the Economy Is Initially in Long-Run Equilibrium

question 147

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

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Definitions:

Employee Empowerment

A strategy where employees are given the authority and resources to make decisions and contribute to the company's success.

Work Environments

Work environments encompass the physical and psychological conditions under which employees work, including the workspace, culture, and occupational health and safety standards.

Job Expansion

A strategy employed by organizations to increase the number and variety of tasks that an employee performs.

Labour Cost

Represents the total expense incurred by employers for the wages, benefits, and taxes associated with their workforce.