Suppose the economy is in long-runequilibrium. If there is a sharp decline inthe stock market combined with atemporary increase in oil price, then wewould expect that in the short run,a. real GDP will rise and the price levelmight rise, fall, or stay the same.b. real GDP will fall and the price levelmight rise, fall, or stay the same.c. the price level will rise, and real GDPmight rise, fall, or stay the same.d. the price level will fall, and real GDPmight 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.

In this scenario, we are considering two events: a sharp decline in the stock market and a temporary…

Answered: Suppose the economy is in long-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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