Define the following terms: a) risky outcome. b) probability
What will be an ideal response?
a) An outcome is risky if it is not known with certainty in advance.
b) Probability is the frequency with which an outcome occurs.
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The oil shock of 2007-2008 saw the price of oil rising from less than $60 a barrel in March 2007 to over $145 a barrel in July 2008, and decreasing again to just over $30 a barrel in December 2008
Assuming the economy was at potential GDP prior to the oil shock, the increase in the price of oil, such as what occurred between March 2007 and July 2008, acts as a negative supply shock, causing the inflation rate to ________ and the output gap to ________. A) increase; become negative B) increase; become positive C) decrease; become negative D) decrease; become positive
Use the above table. Assuming constant opportunity costs, the opportunity cost of producing a gallon of wine in Argentina is
A) 0.33 pound of beef. B) 0.5 pound of beef. C) 2 pounds of beef. D) 3 pounds of beef.