7) Assume that the economy is initially operating at the natural level of output. A simultaneous expansionary monetary policy and an increase in oil prices will cause which of the following? A) an increase in output and a reduction in the interest rate in the short run B) a reduction in output and an increase in the interest rate in the short run C) a reduction in output and a reduction in the interest rate in the short run D) an ambiguous effect in output and an increase in the price level in the short run E) an ambiguous effect in output and a reduction in the price level in the short run

7) Assume that the economy is initially operating at the natural level of output. A simultaneous expansionary monetary policy and an increase in oil prices will cause which of the following? A) an increase in output and a reduction in the interest rate in the short run B) a reduction in output and an increase in the interest rate in the short run C) a reduction in output and a reduction in the interest rate in the short run D) an ambiguous effect in output and an increase in the price level in the short run E) an ambiguous effect in output and a reduction in the price level in the short run

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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