In the Short Run in the Keynesian Model,an Oil Price

question 20

Multiple Choice

In the short run in the Keynesian model,an oil price shock would leave the economy with a ________ level of output and a ________ real interest rate.

• A)higher;lower
• B)lower;higher
• C)lower;lower
• D)higher;higher

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Definitions:

Monopoly

Monopoly is a market structure characterized by a single seller selling a unique product in the market, facing no competition.

One Buyer

A market condition known as a monopsony, where there is only one buyer for a particular product or service, giving that buyer significant control over prices.

Marginal Revenue

The extra revenue obtained from the sale of an additional unit of a product or service.

Substitutes

Goods or services that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.