Suppose there is a temporary supply shock because of a war in the Middle East, then, ceteris paribus, the ensuing cost push shock ________
A) would lead to a temporary increase in prices but a permanent reduction in output
B) would lead to a temporary increase in output but a permanent increase in inflation
C) would lead to a temporary decrease in output but a permanent increase in inflation
D) all of the above
E) none of the above
E
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The crowding-out effect indicates that an increase in a fiscal deficit financed by borrowing will increase interest rates and thereby crowd out some domestic investment spending
a. True b. False Indicate whether the statement is true or false
Changes in the expected future price level:
a. Shifts the short run aggregate supply curve upward b. Shift the long run aggregate supply curve to the right. c. Shift short run aggregate supply curves upward and long run aggregate supply curves to the right. d. Do none of the above