For This Question,assume That the Economy Is Initially Operating at the Natural

question 34

Multiple Choice

For this question,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)a reduction in the interest rate
• B)a reduction in output and an increase in the aggregate price level
• C)a reduction in output and a reduction in the interest rate
• D)a reduction in unemployment, an increase in the nominal wage and an increase in the aggregate price level
• E) a reduction in the aggregate price level and no change in output

---

Definitions:

Parliament

A legislative body in a country that holds the authority to create laws and, often, to oversee the government.

Hessians-German Soldiers

German troops hired by the British to fight in the American Revolutionary War, known for their discipline and effectiveness in battle.

Trenton

The capital city of New Jersey, United States, known for its historical significance, particularly in the American Revolutionary War.

New Jersey

A U.S. state located in the Mid-Atlantic region, known for its significant historical contributions, diverse population, and as the site of major battles during the American Revolutionary War.