In the Short Run, a Supply Shock That Shifts the Short-Run

question 21

Multiple Choice

In the short run, a supply shock that shifts the short-run aggregate supply curve leftward ________ real GDP and ________ the price level.

• A) increases; raises
• B) decreases; raises
• C) increases; lowers
• D) decreases; lowers

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Definitions:

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, such as issuing debt or stock.

Creditors

Individuals, businesses, or financial institutions that are owed money by debtors or customers.

Owner's Equity

Represents an owner's total investment in a company after subtracting liabilities from assets; it signifies the net value an owner has in the business.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back in the future.