Use the Following to Answer Questions

question 25

Multiple Choice

Use the following to answer questions .
Exhibit: Short-run Aggregate Supply
-(Exhibit: Short-run Aggregate Supply) Suppose that the economy is in long-run equilibrium at point A. Now suppose the stock market crashes, significantly reducing household wealth. What happens in the long-run, all other things unchanged?

• A) The aggregate demand curve will shift back to AD₁.
• B) The economy will be stuck at an output level below its potential level.
• C) The economy returns to full-employment equilibrium at point A.
• D) The economy returns to full-employment equilibrium at point D.

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Definitions:

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A power supply unit for computers and electrical devices rated at 1,000 watts, providing the necessary power to support high-performance components and systems.

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