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What is the answer and explanation? 19. Assume an economy at full employment (i.e., at potential GDP) that produces no oil. According to the AS-AD

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What is the answer and explanation?

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19. Assume an economy at full employment (i.e., at potential GDP) that produces no oil. According to the AS-AD model, what is the predicted long-run effect of a permanent increase in the world price of oil? a) Nominal wages will rise and the unemployment rate will remain constant. b) Nominal wages will fall and the unemployment rate will increase. c) Nominal wages will rise and the unemployment rate will fall. d) Real wages will fall and the unemployment rate will remain constant. CD Real wages will increase and the unemployment rate will increase

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