The prices of oil, gasoline, and other petroleum products, which are key inputs in production, have been decreasing in recent months. Other things being equal, which of the following is likely to occur in the U.S. economy as a result of the decline in oil prices?
(a) A decrease in both equilibrium price level and equilibrium real GDP.
(b) An increase in both equilibrium price level and equilibrium real GDP.
(c) A decrease in the equilibrium price level and an increase in equilibrium real GDP.
(d) An increase in the unemployment rate.
2006-11-29 14:01:38 · 4 answers · asked by Anonymous in Social Science ➔ Economics
(c) A decrease in the equilibrium price level and an increase in equilibrium real GDP.
2006-11-29 14:50:13 · answer #1 · answered by JuanB 7 · 0⤊ 0⤋
If you don't have a floor, there are so many farmers (and truck drivers), that the ones in financial difficulty would drive the price for all of them below the minimum profitable level. When all of them went bankrupt, no one would want to farm, and we would have a problem. They are selling a commodity, so the single price is driven down to unprofitability.
2016-03-29 16:35:58 · answer #2 · answered by Anonymous · 0⤊ 0⤋
All of them..but not at the same time.
2006-11-29 14:04:38 · answer #3 · answered by thelordparadox 4 · 0⤊ 0⤋
I agree, the answer should be c).
2006-11-29 18:21:42 · answer #4 · answered by september_logic 1 · 0⤊ 0⤋