Suppose an Economy Is Initially in Equilibrium and There Is

question 100

Multiple Choice

Suppose an economy is initially in equilibrium and there is a sudden increase in oil prices.Which of the following is the most likely result?​

• A)Growth in real GDP
• B)Price stability
• C)Full employment output
• D)Stagflation
• E)Deflation

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Definitions:

Strike Price

The predetermined price at which the holder of an option contract can buy (in case of a call option) or sell (in case of a put option) the underlying asset.

Expiration Date

The specific date on which an options or futures contract becomes void and the right to exercise it no longer exists.

American Call

An option contract that allows the holder to buy a specified quantity of an underlying asset at a set price before the contract expires.

Option Exercise

The act of utilizing the right, but not the obligation, to buy or sell an underlying security at a pre-determined price within a specified time frame.