Consider the Basic AD/AS Macro Model in Long-Run Equilibrium

question 87

Multiple Choice

Consider the basic AD/AS macro model in long-run equilibrium.An expansionary AD shock would have ________ output effect in the short run and ________ output effect in the long run.

• A)a positive; no
• B)a positive; a positive
• C)no; a positive
• D)no; no
• E)not enough information to know

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Definitions:

Common Stock

An equity security that denotes ownership within a corporation and grants the owner voting rights on company issues as well as eligibility to receive dividends.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily match the market value.

Treasury Stock

Shares of a company's own stock that it has reacquired but has not retired, which can be resold or used for other corporate purposes.

Paid-in Capital

The amount of money that shareholders have invested in the company through the purchase of its stock, over and above the par value of the shares.