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

question 12

Multiple Choice

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

• A)decrease; decrease; decrease further; will decrease further
• B)decrease; increase; decrease further; will be restored to potential output
• C)decrease; increase; return to its initial level; will be restored to potential output
• D)increase; increase; decrease; will be restored to potential output
• E)increase; increase; return to its initial level; will be restored to potential output

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Definitions:

Scientific Names

Formal, standardized naming system for organisms, based on Latin and Greek words, that consists of a genus and species designation.

Latin

An ancient Indo-European language of the Italic branch, historical language of the Roman Empire, and a foundation for many modern languages' vocabulary and grammar.

Woese

Woese refers to Carl Woese, a microbiologist known for defining the Archaea (a new domain of life) through phylogenetic taxonomy of 16S ribosomal RNA, a technique that revolutionized the classification of microorganisms.

Prokaryotes

Microorganisms characterized by the absence of a distinct nucleus, including bacteria and archaea, with simpler cellular organization compared to eukaryotes.