Consider the AD/AS Model and Suppose the Economy Begins at Potential

question 95

Multiple Choice

Consider the AD/AS model and suppose the economy begins at potential output.The effect of a negative AS shock on real GDP will be reversed in the long run with a ________ shift in ________.

• A)rightward; AS
• B)rightward; AD
• C)leftward; AS
• D)leftward; AD
• E)leftward; Y*

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Definitions:

Adlai Stevenson

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