Consider the Following News Headline: "World Commodity Prices Rise Sharply

question 83

Multiple Choice

Consider the following news headline: "World commodity prices rise sharply." Choose the statement below that best describes the likely macroeconomic effects in Canada.(Remember that Canada is both a producer and a consumer of commodities.)

• A)There is no change in either the AD or the AS curves.
• B)The AD curve shifts to the left and the AS curve shifts to the right; the price level falls and the effect on real GDP is indeterminate.
• C)The AD and AS curves both shift to the left; the effect on the price level is indeterminate and real GDP decreases.
• D)The AD and AS curves both shift to the right; the effect on the price level is indeterminate and real GDP increases.
• E)The AD curve shifts to the right and the AS curve shifts to the left; the price level rises and the effect on real GDP is indeterminate.

---

Definitions:

Domestic Output

The sum of the value of all products and services generated inside a country's boundaries over a certain time frame.

Pre-migration

Pre-migration pertains to the period or activities before migration, including planning, preparation, and decision-making processes related to moving from one location to another.

Immigration

Immigration is the act of moving to a foreign country to live permanently, often driven by factors like employment, education, family reunification, or escaping conflict.

Country A

A placeholder name often used to represent a hypothetical or specific country in discussions or analyses.