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:

Control

The process of monitoring activities to ensure they are being accomplished as planned and correcting any significant deviations.

Quality Levels

The standards or benchmarks set to measure the overall excellence or effectiveness of a product, service, or process.

Product-distribution Franchising

A franchising model in which the franchisee is granted the right to sell the franchisor's products, often including distribution rights in a specific territory.

Exclusive Dealers

Distributors or retailers given the sole rights to sell a company's products in a specific territory or market.