Suppose That the Economy Is at the Natural Rate of Output.In

question 61

Multiple Choice

Suppose that the economy is at the natural rate of output.In the absence of accommodating policy and everything else held constant,the net result of a negative supply shock is that

• A)the economy returns to full employment at the initial price level.
• B)the economy returns to full employment at a higher price level.
• C)the economy returns to full employment at a lower price level.
• D)aggregate output increases above the natural rate level,but only temporarily.

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Definitions:

Organic Farming

A method of farming that avoids the use of synthetic pesticides and fertilizers, emphasizing natural processes and biodiversity.

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