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

question 55

Multiple Choice

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

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

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Definitions:

Payments Received

Transactions or transfers of money that one receives, typically in exchange for goods, services, or to satisfy debts.

Hardship Case

An instance or situation in which an individual or group faces significant adversity or difficulty, often used in legal, financial, or medical contexts to denote special circumstances that require consideration.

Medicaid

A federally funded health cost–assistance program for low-income, blind, and disabled patients; families receiving aid to dependent children; foster children; and children with birth defects.

County Assistance

Programs and services provided by a county government to support its residents, especially in health, financial, or emergency situations.