By Itself, a Supply Shock Such as a Hike in the Price

question 37

Multiple Choice

By itself, a supply shock such as a hike in the price of oil, can

• A) cause a wage-price spiral.
• B) not cause inflation.
• C) be inflationary as long as there is no policy response.
• D) cause real GDP to permanently decrease year after year.

Understand scarcity and how it necessitates economic choice and competitive behavior.

Analyze the impact of government policies and incentives on individual and market behaviors.

Recognize logical fallacies in economic reasoning, including the fallacy of composition and misunderstanding of causation.

Understand the principle of ceteris paribus and its importance in economic analysis.

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Definitions:

Inter-Observational Reliability

The degree to which different observers or raters consistently assess or measure the same phenomenon in a similar way.

Inter Rater Reliability

The degree of agreement among different raters or observers assessing the same phenomenon, indicating the consistency of measurements.

Threat To Internal Validity

Any factor that might lead to incorrect conclusions about the causal relationship between independent and dependent variables in a study.

Maturation

The process of growth or development, often used in psychology to describe personal or cognitive development over time.