Assume That the Economy Is Initially Operating at the Natural

question 23

Multiple Choice

Assume that the economy is initially operating at the natural level of output. An increase in the price of oil will cause which of the following in the medium run?

• A) An increase in output and a decrease in the interest rate.
• B) A decrease in unemployment, an increase in the nominal wage and an increase in the aggregate price level.
• C) An increase in the interest rate.
• D) An increase in the aggregate price level and no change in output.
• E) A decrease in output and an increase in the aggregate price level.

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Definitions:

Epithelial Cells

Epithelial cells make up the epithelium, a layer of cells that covers the surfaces and cavities of organs and structures throughout the body, providing protection, secretion, and absorption.

Nasal Cavity

The large air-filled space behind the nose involved in breathing and olfaction, lined with mucosa that filters, moistens, and warms incoming air.

Bronchi

The major air passages of the lungs that diverge from the windpipe, providing a pathway for air to reach the lungs.

Carbon Dioxide

It's a transparent, unscented gas formed through the burning of carbon-containing compounds and the act of breathing, which is assimilated by plants in the photosynthesis process.