Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider an oil-exporting economy in its long-run equilibrium. Which of the following explains the ultimate short-run effect of a decrease in international oil price on

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Consider an oil-exporting economy in its long-run equilibrium. Which of the following explains the ultimate short-run effect of a decrease in international oil price on the GDP of this economy? O The GDP will ultimately increase. The GDP will ultimately decrease. O The effect on GDP will be ambiguous. O The GDP will ultimately be at potential output.Which of the following policies will boost the output in the economy in the short-run: O Increase in the required reserve ratio or increase in the interest rate on loans to commercial banks from by central bank. open market action of the central bank in the form of selling assets. O Increase in the required reserve ration or open market action of the central bank in the form of selling assets. O Open market action of the central bank in the form of buying assets or decrease in the required reserve ratio.Consider a non-oil-exporting economy in its long-run equilibrium. Which of the following explains the ultimate short-run effect of a decrease in international oil price on the GDP of this economy? O The GDP will ultimately decrease. O The GDP will ultimately increase. O The effect on GDP will be ambiguous . The GDP will ultimately be at potential output, in the absence of downward- sticky wages .Consider an oil-exporting economy in its short-run equilibrium. What does our model predict as the effect on the economy's Gross Domestic Product (GDP) in the short-run when the international price of oil drops and the effect of such a shock on demand side is substantially large than on the supply side? O The change in GDP is unclear. O GDP increases. O GPD decreases . GDP will not be substantially affected as ultimately the Transition/Adjustment effect will bring the GDP back to its original level.What is the effect on the Aggregate Expenditure (AE) graph and AE level, of a reduction in net exports caused by increase in the price level in an economy where there is foreign trade? O The original AE graph shifts down, AE level declines along the new AE graph . O The original AE graph shifts up, AE level increases along the new AE graph. No change in AE graph, AE level increases along the original AE graph. )No change in AE graph, AE level decreases along the original AE graph

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Macroeconomics Principles Applications And Tools

Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez

7th Edition

978-0134089034, 9780134062754, 134089030, 134062752, 978-0132555234

More Books

Students also viewed these Economics questions

Question

2. Outline the steps in the decision-making process.

Answered: 1 week ago

Question

=+ c. What happens to investment in Oceania?

Answered: 1 week ago