Suppose the Economy Is Initially in Equilibrium and Then an Energy

question 150

Multiple Choice

Suppose the economy is initially in equilibrium and then an energy shock occurs,such as when OPEC raised oil prices.Which of the following is likely to result?

• A)Both the price level and aggregate output will rise.
• B)Both aggregate output and the price level will fall.
• C)Employment will rise.
• D)Stagflation.
• E)The price level will fall.

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Definitions:

Extended Problem Solving

A consumer decision-making process employed when purchasing complex or expensive products, involving extensive information gathering and evaluation.

Cognitive Dissonance

A psychological state experienced by an individual when holding two or more contradictory beliefs, ideas, or values, often resulting in discomfort and the motivation to reduce the inconsistency.

Situational Influences

External factors that affect consumer behavior and decision-making process, including physical surroundings, social environment, and temporal perspective.

Purchase Decision Process

The steps consumers go through before buying a product, including problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.