Starting from Long-Run Equilibrium, the Long-Run Impact(s)of a Sharp Drop

question 39

Multiple Choice

Starting from long-run equilibrium, the long-run impact(s) of a sharp drop in oil prices, compared to the original equilibrium, is(are) :

• A)higher inflation and the same output.
• B)lower inflation and lower output.
• C)the same inflation and the same output.
• D)higher inflation and lower output.

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Definitions:

Conspiracy

An agreement between two or more parties to commit an illegal act or to use illegal means to achieve a legal end.

Interindustry Competition

Refers to competition between firms in different industries vying for the same set of customers, often through substitution of products or services.

Intraindustry Competition

Competition among companies within the same industry or sector, vying for the same customer base.

Monopoly Power

The ability of a single seller in a market to control prices and exclude competition, often subject to regulation and antitrust laws.