Suppose Canada's Economy Is in a Long-Run Equilibrium with Real

question 76

Multiple Choice

Suppose Canada's economy is in a long-run equilibrium with real GDP equal to potential output.Now suppose there is a decrease in the Canadian price of all imported raw materials.In the short run,________.In the long run,________.

• A)real GDP and the price level both fall; real GDP is below its original level with a lower price level
• B)real GDP and the price level both rise; real GDP is above its original level with a higher price level
• C)real GDP and the price level both rise; real GDP returns to its original level with a higher price level
• D)real GDP rises and the price level falls; real GDP and the price level return to their original levels
• E)real GDP falls and the price level rises; real GDP is below its original level with a higher price level

Understand the concept of accounting and economic profits and their differences.

Comprehend the effects and effectiveness of usury laws on the interest rates and loan markets.

Analyze the role of economic profit in competitive equity, innovation, and risk management.

Interpret data from tables related to market equilibrium, interest rates, and loanable funds.

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