Suppose There Is a Temporary Supply Shock Because of a War

question 63

Multiple Choice

Suppose there is a temporary supply shock because of a war in the Middle East,then,ceteris paribus,the ensuing cost push shock ________.

• A)would lead to a temporary increase in prices but a permanent reduction in output
• B)would lead to a temporary increase in output but a permanent increase in inflation
• C)would lead to a temporary decrease in output but a permanent increase in inflation
• D)all of the above
• E)none of the above

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Definitions:

Practice

The actual application or use of an idea, belief, or method, as opposed to theories relating to it.

Reconstruction Governments

were formed in the southern United States after the Civil War, tasked with rebuilding and integrating the states back into the Union, often with significant Northern and federal government influence.

Economic Policies

Economic policies are strategies and decisions made by governments or institutions to influence or control the economic behavior of a country or region.

Southern Society

Refers to the social structure and culture of the American South, historically characterized by agrarian economy, plantation system, and social stratification including slavery.