Financial Crisis Suppose that banks are less able to raise funds and so lend less. Consequently, because people and households are less able to borrow, they spend less at any given price level than they would otherwise. The crisis is persistent so lending should remain depressed for some time. Refer to Financial Crisis. What happens to the price level and real GDP in the short run?

Which of the following is NOT correct about the effects of a tariff on an imported product?

A) Tariffs benefit domestic producers by raising price and domestic output. B) Tariffs increase government revenue. C) Tariffs mean higher prices and less consumption for consumers of the product. D) Tariffs increase the efficiency of how resources are allocated.

The response of output following a natural disaster includes

A) an increase in output demand and an increase in output supply. B) an increase in output demand and a decrease in output supply. C) a decrease in output demand and an increase in output supply. D) a decrease in output demand and a decrease in output supply.