Wuee bssgesing Suppily shilts ) Whom the supply shits frhom sasit of he sgrpl cu

Question

Wuee bssgesing Suppily shilts ) Whom the supply shits frhom sasit of he sgrpl cuvel the equiliherium peice changes fhom: to S (a let A) 15 units to 20 units. In counteracting a negative supply shock, the Federal Reserve could achieve usingeary poicy A) fall employment but not price stabilitys expansionary B) price stability but mot full employment expansionary O) hoth price stability and full employment expansionary D) both price stability and full employment; contractionary 7. If personal cossumption is $100, investment is $25, govemment purchases tot imports equal $20, and exports equal s1Q, then GDP equals: A) SI80 B) SIS0 C) $140 D) $160

Explanation / Answer

5. When supply curve makes a leftward shift the price increases from $40 to $60. As a decrease in supply will increase the price.

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