The OPEC oil embargo of 1973, an event marked by a reduction in the production of oil, a reduction in exported oil to the US, and an increase in oil prices for the US, may have contributed towards the {expansion, recession} of 1973 and {decrease, increase} in real GDP caused by a(n) {decrease, increase}in aggregate supply.
1. In 2011, a record-breaking earthquake and tsunami hit Japan and destroyed roads, buildings, and nuclear power plants. How will this natural disaster impact the U.S. economy in the short run?
Choose one:
A. real GDP will increase; price level will increase; unemployment will increase
B. real GDP will decrease; price level will decrease; unemployment will decrease
C. real GDP will increase; price level will increase; unemployment will decrease
D. real GDP will decrease; price level will decrease; unemployment will increase
2. In the long run, all other things equal, a hurricane in Louisiana will {increase, decrease, not change} U.S. output, {increase, decrease, not change} price level, and {increase, decrease, not change} unemployment.