Unlike the Suez Canal, the Panama Canal is highly relevant for the US economy. A blockage of the Panama Canal could produce severe supply disruptions for the US economy. Suppose there is a severe blockage of the Panama Canal that last for six weeks. The following questions consider how such a blockage of the Panama Canal would affect the US economy in the short-run. Which of the following statements describes how a blockage of the Panama Canal would affect the US economy in the short run? A) The price level would increases and real GDP would rise above its natural level. B) The price level would decrease and real GDP would rise above its natural level. C) The price level would decrease and real GDP would fall below its natural level. D) The price level would increase and real GDP would fall below its natural level
Unlike the Suez Canal, the Panama Canal is highly relevant for the US economy. A blockage of the Panama Canal could produce severe supply disruptions for the US economy. Suppose there is a severe blockage of the Panama Canal that last for six weeks. The following questions consider how such a blockage of the Panama Canal would affect the US economy in the short-run. Which of the following statements describes how a blockage of the Panama Canal would affect the US economy in the short run? A) The price level would increases and real GDP would rise above its natural level. B) The price level would decrease and real GDP would rise above its natural level. C) The price level would decrease and real GDP would fall below its natural level. D) The price level would increase and real GDP would fall below its natural level
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Unlike the Suez Canal, the Panama Canal is highly relevant for the US economy. A blockage of the Panama Canal could produce severe supply disruptions for the US economy. Suppose there is a severe blockage of the Panama Canal that last for six weeks. The following questions consider how such a blockage of the Panama Canal would affect the US economy in the short-run.
Which of the following statements describes how a blockage of the Panama Canal would affect the US economy in the short run?
A) The price level would increases and real GDP would rise above its natural level.
B) The price level would decrease and real GDP would rise above its natural level.
C) The price level would decrease and real GDP would fall below its natural level.
D) The price level would increase and real GDP would fall below its natural level
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education