In the Static AD-AS Model, What Is the Most Likely

question 47

Multiple Choice

In the static AD-AS model, what is the most likely long-run outcome of an oil price increase, if no policy change is implemented?

• A)real wages will decline while the levels of output and prices will remain unchanged
• B)the level of prices will increase while the level of output will remain unchanged
• C)the natural unemployment rate and the price level will both increase
• D)nominal wages and prices will increase, but real wages will remain unchanged
• E)real money balances and real wages will decline while nominal wages will remain unchanged

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Definitions:

Apology

An expression of regret or sorrow for having done something wrong, often aiming to restore a damaged relationship.

Working Style

Describes the manner in which an individual approaches tasks and interacts with colleagues in a professional setting.

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Good Alternative

A suitable or preferable option that serves as a substitute for something else.