Use the graph below to answer 16 Assume an oil importing

Use the graph below to answer 16 assume an oil

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Use the graph below to answer questions 16-17.
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16. Assume an oil-importing economy is operating in long-run equilibrium. Unexpectedly, widespread civil unrest severely curtails oil exports in oil-producing countries, resulting in severe world-wide shortages. In the short run, the most likely impact would be thatAggregateShort-runPriceReal GrossDemandAggregate SupplyLevelDomestic Product(A) IncreasesIncreasesIncreasesUncertain(B)DecreasesDecreasesUncertainDecreases(C)ConstantDecreasesIncreasesDecreases(D)DecreasesIncreasesIncreasesUncertain(E)ConstantDecreasesIncreasesUncertain Difficulty: Medium Style: Application AP Economics Curricular Requirement Macroeconomics: Short and Long Run Book Section: Cost-Push Inflation in the Extended AD-AS Model 17. Assume that the economy is operating in long-run equilibrium. To balance the budget, the government raises personal income taxes. In the short run, the increase in personal income taxes would most likely cause each of the following changes. Aggregate Short-Run Price Real Gross Demand Aggregate Supply Level Domestic Product (A) Increase Decrease Increase Uncertain (B) Decrease Constant Decrease Decrease (C) Constant Decrease Decrease Decrease (D) Decrease Decrease Decrease Uncertain (E) Decrease Increase Decrease Decrease (B) In the short run, an increase in personal income taxes will decrease aggregate demand. The price level will decrease and real gross domestic product will decrease, but short-run aggregate supply will remain constant. Difficulty: Medium Style: Application
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AP Economics Curricular Requirement Macroeconomics: Short and Long Run Book Section: Recession and the Extended AD-AS Model Use the graph below to answer questions 18-19. 18. Assume that the economy is operating in short-run equilibrium at point A. Without government intervention, the following adjustments would most likely happen. Aggregate Short-Run Price Real Gross Demand Aggregate Supply Level Domestic Product (A) Increase Increase Uncertain Increase (B) Decrease Constant Decrease Decrease (C) Increase Constant Increase Increase (D) Constant Increase Decrease Increase (E) Constant Decrease Decrease Increase (D) Without intervention, resources prices including workers’ wages would decrease, short-run aggregate supply would increase, price levels would decrease, and real gross domestic product would increase. Aggregate demand would remain constant. Difficulty: Hard Style: Application AP Economics Curricular Requirement Macroeconomics: Actual versus Full-Employment Output Book Section: Long-Run Equilibrium in the Extended AD-AS Model
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