Suppose There Was a Sharp Reduction in Stock Prices and a Sharp

question 66

Multiple Choice

Suppose there was a sharp reduction in stock prices and a sharp increase in the world price of crude oil. Within the framework of the AD/AS model, how would these two changes influence the U.S. economy?

• A) The lower stock prices would increase SRAS, and the higher crude oil prices would reduce AD; as a result, there would be downward pressure on the general level of prices.
• B) The lower stock prices would reduce SRAS, and the higher crude oil prices would increase AD; as a result, there would be upward pressure on the general level of prices.
• C) The lower stock prices would increase AD, and the higher crude oil prices would increase SRAS; as a result, output would tend to increase.
• D) The lower stock prices would reduce AD, and the higher crude oil prices would reduce SRAS; as a result, output would tend to decline.

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Definitions:

Meninges

The three protective membranes that cover the brain and spinal cord, including the dura mater, arachnoid mater, and pia mater.

Glia

Non-neuronal cells in the central nervous system that support, protect, and nourish neurons.

Ventricles

Hollow structures within the brain that produce and store cerebrospinal fluid, or chambers of the heart that pump blood.

Stereotaxic Instrument

A precise tool used in neuroscience and surgery for positioning electrodes or other devices within the brain of an animal or human.