Suppose That the Money Prices of Raw Materials Increase So

question 275

Multiple Choice

Suppose that the money prices of raw materials increase so that short-run aggregate supply decreases. If the Federal Reserve does not respond, the higher money price of raw materials will i. repeatedly shift the aggregate demand curve rightward and raise the price level.
Ii. shift the aggregate demand curve rightward and the aggregate supply curve leftward, raising prices.
Iii. result initially in lower employment and a higher price level.

• A)i only
• B)both i and ii
• C)both ii and iii
• D)i and iii
• E)iii only

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Definitions:

Increasing Acidity

Refers to a trend or condition that leads to an increase in the acidic character or strength of substances.

Conjugate Acid

A species formed by the reception of a proton by a base, characterized by having one more proton and an increased positive charge compared to the original base.

Acetone

A volatile, colorless liquid with the formula (CH3)2CO, used as a solvent and in the production of various chemicals.

Electrophile

A chemical species that accepts an electron pair in order to bond to a nucleophile during a chemical reaction.