Assuming That the Economy Is Currently in a Long-Run Equilibrium

question 44

Multiple Choice

Assuming that the economy is currently in a long-run equilibrium with real GDP equal to Y*,a positive AD shock (with no change in the money supply) will eventually result in

• A)no change in the price level.
• B)an ongoing inflation in the economy.
• C)a lower price level and GDP below its potential level.
• D)a higher price level and GDP at its potential level.
• E)a lower price level and GDP at its potential level.

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Definitions:

Graduate Internships

Work experience placements for individuals who have recently completed a degree, offering practical experience in their field of study.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, used for hypothesis testing.

Non-normal Populations

Populations that do not follow a normal distribution, which affects the choice of statistical methods used.

Independently

Without being influenced by others or by external factors; in statistics, refers to events that have no effect on the likelihood of other events occurring.