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:

Ossicles

Small bones, particularly referring to the three bones found in the middle ear known as the malleus, incus, and stapes, crucial for hearing.

Membranous Labyrinth

An intricate structure within the inner ear containing fluid-filled tubes and sacs, essential for hearing and balance.

Bony Labyrinth

A complex system of passages and cavities within the temporal bone of the skull, housing the organs of hearing and balance.

Tastant

A substance that can be tasted, stimulating the taste buds and contributing to the sense of taste.