Give the correct answer with detailed explanation and don't copy from internet.

Economics

1.

What is one explanation for the instability of oil prices?

a. inefficient production techniques that have made it unprofitable to develop oil

b. fluctuations in the inflation rate in major economies

c. pressure from environmental groups to reduce carbon emissions

d expansion in the market for Canadian oil due to new pipeline construction

2.

Which government action will shift the aggregate demand left?

a. a decrease in taxes

b. a decrease in the money supply

c. signing a free trade agreement

d. repealing an import tariff (why d is not the answer?)

3.

An increase in which of the following (assuming the increase was not due to a price level change) shifts aggregate

demand to the right?

a. interest rates

b. immigration

c. government surplus

d. net exports

4.

Which statement best characterizes the effect of inflation?

a. It impedes financial markets in their role of allocating resources.

b. It reduces the purchasing power of the average consumer. (why b is not the answer?)

c. Generally, it increases after-tax real interest rates.

d. It directly lowers living standards.

5.

What is inflation positively correlated with?

a. nominal wage growth

b. real interest rate

c. productivity growth rate

d. the price level (why d is not the answer)