Please highlight the correct answer for each of the two questions and explain why the correct answer is right if you can. If the FED accommodates an adverse supply shock, then output fallsless; lessmore; moremore; lessless; morebut prices rise A favorable supply shock occurs when:unions push wages upan oil cartel breaks up and oil prices fallenvironmental protection laws raise costs of productionthe FED increases the money supply

(1). In an adverse supply shock, there is rise in prices. If the Fed accommodates an adverse supply…

Answered: If the FED accommodates an adverse…

If the FED accommodates an adverse supply shock, then output falls less; less more; more more; less less; more but prices rise

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please highlight the correct answer for each of the two questions and explain why the correct answer is right if you can.

If the FED accommodates an adverse supply shock, then output falls
less; less
more; more
more; less
less; more
but prices rise

A favorable supply shock occurs when:
unions push wages up
an oil cartel breaks up and oil prices fall
environmental protection laws raise costs of production
the FED increases the money supply

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