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Capital Market Expectations
Capital Market Expectations
Hard
Following the 1973 OPEC oil embargo, US trend productivity growth appeared to slow from approximately 2.5% to 1.5% for over a decade. The most likely explanation for this persistent effect is:
A
The existing capital stock had been optimized for cheap energy, requiring a prolonged period of costly retooling and structural adjustment
B
OPEC's supply restrictions continued indefinitely, preventing any return to normal energy prices
C
Statistical measurement errors made the productivity slowdown appear larger than it actually was
D
Fiscal and monetary policy responses to the embargo caused permanent damage to productive capacity
Select an answer to continue
Tags
#natural-resources
#opec-1973
#productivity-slowdown
#structural-adjustment
#trend-growth
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CFA Level III — Capital Market Expectations Practice Question | AcadiFi | AcadiFi