Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a temporary increase in oil price, then we would expect that in the short run, a. real GDP will rise and the price level might rise, fall, or stay the same. b. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same. 20. Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a temporary increase in oil price. then we would expect that in the short run, real GDP will rise and the price level might rise, fall, or stay the same. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same.

MACROECONOMICS
14th Edition
ISBN:9781337794985
Author:Baumol
Publisher:Baumol
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section: Chapter Questions
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Suppose the economy is in long-run
equilibrium. If there is a sharp decline in
the stock market combined with a
temporary increase in oil price, then we
would expect that in the short run,
a. real GDP will rise and the price level
might rise, fall, or stay the same.
b. real GDP will fall and the price level
might rise, fall, or stay the same.
c. the price level will rise, and real GDP
might rise, fall, or stay the same.
d. the price level will fall, and real GDP
might rise, fall, or stay the same.
20. Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a temporary increase in oil price.
then we would expect that in the short run,
real GDP will rise and the price level might rise, fall, or stay the same.
real GDP will fall and the price level might rise, fall, or stay the same.
c.
the price level will rise, and real GDP might rise, fall, or stay the same.
d.
the price level will fall, and real GDP might rise, fall, or stay the same.
Transcribed Image Text:Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a temporary increase in oil price, then we would expect that in the short run, a. real GDP will rise and the price level might rise, fall, or stay the same. b. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same. 20. Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a temporary increase in oil price. then we would expect that in the short run, real GDP will rise and the price level might rise, fall, or stay the same. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same.
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