If Rapid Increases in Oil Prices Caused Price Levels to Increase

question 144

Multiple Choice

If rapid increases in oil prices caused price levels to increase and real GDP to decrease in the short run,the economy would experience

• A)stagflation.
• B)long-run economic decline.
• C)hyperinflation.
• D)an increase in the natural rate of unemployment.

---

Definitions:

Notes Payable Account

A notes payable account is a liability account on a company's balance sheet representing amounts the company owes under written promissory notes.

Annual Payments

Annual payments refer to the amount paid every year, either as an obligation, such as a subscription, or as part of a financial arrangement like a loan.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation each year over the asset's useful life.