Consider the Basic AD/AS Macro Model in Long-Run Equilibrium

question 44

Multiple Choice

Consider the basic AD/AS macro model in long-run equilibrium.An expansionary AD shock will ________ the price level and ________ output in the short run.In the long run,the price level will ________ and output will ________.

• A)decrease; decrease; decrease further; decrease further
• B)decrease; decrease; decrease further; be restored to potential output
• C)increase; increase; increase further; increase further
• D)increase; decrease; increase further; be restored to potential output
• E)increase; increase; increase further; be restored to potential output

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