Which of the following is an example of a supply shock?
A. a surprise increase of the money supply
B. an increase in government spending
C. a sharp increase in the price of oil
D. an increase in the price level
Answer: C
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Which of the following is likely to cause a decrease in both the wage rate and the level of employment in an industry?
A) A right shift in the supply curve for labor, without any change in the demand curve for labor B) A left shift in the supply curve for labor, without any change in the demand curve for labor C) A right shift in the demand curve for labor, without any change in the supply curve for labor D) A left shift in the demand curve for labor, without any change in the supply curve for labor
What actions should the Fed take if it believes the economy is about to fall into recession?
What will be an ideal response?