If the Current Short-Run Equilibrium Level of Output Is Greater

question 111

Multiple Choice

If the current short-run equilibrium level of output is greater than full-employment output,we can then expect that in the long run the

• A) price level will rise and short-run aggregate supply will fall.
• B) price level will rise and aggregate demand will fall.
• C) price level will fall and short-run aggregate supply will rise.
• D) price level will fall and aggregate demand will rise.
• E) long-run aggregate supply will increase.

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Definitions:

Entores Ltd.

A landmark case in contract law that established the principle that an acceptance of an offer becomes effective when communicated.

Telex

A communication network system used to send text messages through a network of teleprinters, historically significant before the advent of modern digital communications.

Postbox Rule

A legal principle that deems an offer accepted once the acceptance is posted, not when it is received by the offeror.

Counter-Offer

A response to an initial offer, proposing different terms in an attempt to reach a mutual agreement.