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:

Vehicle Chassis

The main structural frame of a vehicle, including the undercarriage and foundation to which the body and mechanical components are attached.

Priority

The designation of an item or task as more important relative to other items or tasks, determining its order of attention or action.

Data Bus

A communication system within a computer or between computers designed to transfer data.