Scenario 35-1 Suppose That in the First Half of June 2022, the 2022

question 138

Multiple Choice

Scenario 35-1
Suppose that in the first half of June 2022, the effects of a housing and financial crisis and an increase in world prices of oil and foodstuffs were affecting the economy.
-Refer to Scenario 35-1. In the short-run the effects of the housing and financial crises

• A)raise both inflation and the unemployment rate.
• B)raise the inflation rate and reduce the unemployment rate.
• C)reduce the inflation rate and raise the unemployment rate.
• D)reduce both the inflation rate and the unemployment rate.

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Definitions:

Crop Destroyed

A situation where agricultural produce is damaged or obliterated due to factors like natural disasters, pests, or disease.

Excess Supply

A condition in the market where the quantity of a good or service supplied is greater than the quantity demanded at the current price.

Price Of Burritos

The amount of money required to purchase one unit of a burrito, determined by factors such as ingredients, preparation costs, and market demand.

Demand Shifts

Changes in consumer desire that lead to an increase or decrease in the quantity demanded at every price point.