Question

Look at the following list of observed phenomena and select the probable cause of each phenomenon:...

Look at the following list of observed phenomena and select the probable cause of each phenomenon:

Observation Likely Cause
a. Decrease in the price level and output in the short run      (Click to select)  Negative  Either positive or negative  Positive     (Click to select)  temporary supply-side shock  permanent supply-side shock  demand-side shock
b. Increase in the price level in the long run with no change in output      (Click to select)  Positive  Either positive or negative  Negative     (Click to select)  temporary supply-side shock  permanent supply-side shock  demand-side shock
c. Increase in output in the short run with a lower price level      (Click to select)  Negative  Either positive or negative  Positive     (Click to select)  temporary supply-side shock  demand-side shock  permanent supply-side shock
d. No change in the price level or output in the long run      (Click to select)  Either positive or negative  Positive  Negative     (Click to select)  demand-side shock  permanent supply-side shock  temporary supply-side shock
e. Increase in the price level in the long run with a reduction in output      (Click to select)  Negative  Positive  Either positive or negative     (Click to select)  permanent supply-side shock  temporary supply-side shock  demand-side shock
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