Suppose Prices and Wages Are NOT Flexible

question 116

Multiple Choice

Suppose prices and wages are NOT flexible.What is most likely to occur after an adverse supply shock?  

• A) deflation 
• B) unemployment 
• C) inflation 
• D) full employment

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Definitions:

Tariff of Abominations

The nickname given to the Tariff of 1828 in the United States, which imposed high duties on imports and sparked significant controversy, especially in the South.

Nullification Crisis

A political confrontation in the early 1830s between the state of South Carolina and the Federal government over the latter's right to impose tariffs.

Presidential Veto

The power of the president to refuse approval of a bill or joint resolution, thus preventing its enactment into law.

Executive Power

The authority granted to the executive branch of a government, including powers like enforcing laws, administering the public policy, and commanding the armed forces.