By Itself,a Supply Shock,such as a Hike in the Price

question 157

Multiple Choice

By itself,a supply shock,such as a hike in the price of oil,can

• A)cause real GDP to permanently decrease year after year.
• B)not result in persisting inflation.
• C)be inflationary as long as there is no policy response.
• D)result in persisting inflation if aggregate supply persistently increases.
• E)result in a persisting wage-price spiral.

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Definitions:

Small Scale Industry

A sector comprising of businesses that operate on a small scale, typically characterized by low investment, fewer employees, and less revenue compared to large-scale industries.

Open Account

A form of payment in which an importer doesn’t pay for goods until after they have been received, creating an unfavorable balance of value for the exporter.

Less Favorable

Describes conditions or treatment that are comparatively disadvantageous or inferior to others.

Potential Risk

A possibility of harm, loss, or any negative occurrence that may or may not happen in the future.