Which of the Following Is True for an Economy That

question 26

Multiple Choice

Which of the following is true for an economy that has experienced a temporary supply shock?

• A) The supply shock is likely to have shifted the short-run aggregate supply curve to the right.
• B) There is likely to be a fall in inflationary expectations in the economy.
• C) Short-run macroeconomic equilibrium will consist of lower GDP and higher inflation.
• D) The central bank is likely to reduce interest rates to bring the inflation rate down.

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Definitions:

Family Planning

The practice of controlling the number and spacing of offspring through the use of contraception or fertility control.

Vas Deferens

The duct through which sperm travels from the testicle to the urethra, essential for the delivery of male gametes to the female reproductive tract.

Male Sterilization

A form of contraception involving a surgical procedure (vasectomy) that makes a man permanently unable to father children.

Laparoscopy

A form of tubal ligation using a viewing lens (the laparoscope) to locate the fallopian tubes and another instrument to cut or block and close them.