Suppose the Economy Was in Long-Run Equilibrium When There Is

question 163

Multiple Choice

Suppose the economy was in long-run equilibrium when there is a sudden increase in interest rates. What happens in the short run after the increase in the interest rates?

• A) Both the price level and real GDP rise.
• B) The price level falls and real GDP does not change.
• C) The price level does not change and real GDP falls.
• D) Both the price level and real GDP fall.

---

Definitions:

Shape Style

A set of pre-designed formatting options that can be applied to shapes and graphics within a document or presentation software to enhance their appearance.

More Button

A user interface element that, when clicked, reveals additional options or content that were not initially visible.

Recommended Charts Button

A feature in some software applications that suggests the most suitable chart types to visually represent the specific data a user has selected.

PivotChart Button

A tool in spreadsheet software that allows users to quickly create a PivotChart, a graphical representation of data in a PivotTable, enabling easy visualization of complex data sets.