Suppose OPEC sharply increased the price of oil, which triggered higher inflation rates in the US. This type of inflation is best classified as?
This type of inflation which is caused by an increase in the price of the input will be considered as cost push inflation, this inflation will lead to increase in the unemployment increase in the price. Oil is input for many goods and an increase in the price of this good will push the cost up.
Suppose OPEC sharply increased the price of oil, which triggered higher inflation rates in the US....
The inflation associated with the oil price shocks in the 1970s after OPEC restricted the supply of oil is an example of demand-pull inflation due to a supply shock. demand-pull inflation due to a demand shock. cost-push inflation due to a demand shock. cost-push inflation due to a supply shock. If initial equilibrium real Gross Domestic Product (GDP) is $400 billion, MPC = 0.9, and autonomous investment increases $40 billion, equilibrium real Gross Domestic Product (GDP) will be $800 billion....
The short-run aggregate supply curve is shown at right. Suppose OPEC decides to reduce oil production. Using the line drawing tool, draw and label a new short-run aggregate supply. Carefully follow the instructions above, and only follow the required object. The impact would result in Price Level AD O A. inflation: a lower price level and lower unemployment. O B. recession: a lower price level and higher unemployment. O C. stagflation: a higher price level and higher unemployment. OD. depression:...
Assume the economy is in long run equilibrium. Suppose that next month OPEC doubles the world price of oil. The short run effect on the US economy would be: A. deflation and recession ETnflationand'stabl0output C. Inflation and recession D. stable prices and recession
How can a higher price of oil create inflation?
Suppose that US inflation rate is higher than Japan’s inflation rate. How would this affect the exchange rate between the $ US and the yen?
Which of the following is a normative statement? O A. A higher price of oil means that people will buy less. O B. During a recession, unemployment rates rise. O C. The government should keep inflation from rising. O D. Rapid rates of economic growth can lead to environmental damage. Click to select your answer and then click Check Ans All parts showing
7) An increase in the price of oil will likely cause which of the following? A) increase the markup in the Phillips curve equation B) increase the sum "m z" in the Phillips curve equation C) increase the natural rate of unemployment D) all of the above 8) Suppose the Phillips curve is represented by the following equation: -mt-1-0.2-2ut- Given this information, we know that the natural rate of unemployment in this economy is A) 1096. B) 20%. C) 6.5%....
2. Inflation and real interest rates (10 points total) a) Suppose that the consumer price index was 100 on January 1st, 2000 and 105.5 on January 1st, 2001. Determine the inflation rate between the two dates. Show your work. (5 points) b) Suppose that the consumer price index was 100 on January 1st, 2000 and 98 on January 1st, 2001. Determine the inflation rate between the two dates. Show your work. (5 points)
Nane ID: A Soks A nd Bhave the same price and are in equilibeium, but retura Which of the fellowing stalements is CORRECT Stock A has the higher reqpired rate of C U Stok Ahas a lower divide ield than Stock B, its expected capital gains yield be higher than Stock B' Sock B st have a higher divideed yield than Stock A e Stock A mut have a higher dividend yield than Stock B dir Stock Ahas a higher...
In general, inflation triggers an increase in interest rates, which increases the demand for (and therefore price of) bonds and decreases demand for (and therefore the price of) stocks. Use a supply and demand diagram to explain why stock prices reacted the way they did based on an anticipated rise in interest rates. The interest rate has not increased yet, but is expected to in the future.