If the Economy Is in Long Run Equilibrium and Aggregate

question 322

Multiple Choice

If the economy is in long run equilibrium and aggregate demand increases, then in the short run

• A) the price level rises and real GDP increases.
• B) the price level rises and real GDP does not change.
• C) real GDP increases and the price level does not change.
• D) nothing happens because the economy is in long run equilibrium.

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Definitions:

Adjusting Entries

Journal entries made in accounting to update the records for expenses and revenues that have accrued but not yet been recorded.

Unadjusted Trial Balance

A listing of all the accounts and their balances from the ledger, before any adjusting entries are made for preparing financial statements.

End-of-period Spreadsheets

Summarizing documents prepared at the end of an accounting period that compile balances from ledgers for financial reporting.

Accounting Records

Documents that track and record the financial transactions and activities of an entity, used for auditing and financial analysis.