Suppose the Current Situation Is Such That the Price Level

question 15

Multiple Choice

Suppose the current situation is such that the price level is 120, real GDP is $13 trillion, and GDP along the long- run aggregate supply curve is $12.6 trillion. What will take place to restore the long- run equilibrium?

• A) The price level will fall until long- run aggregate supply increases to $13 trillion.
• B) The price level will fall and money wage rates will rise until real GDP along the long- run aggregate supply curve is $13 trillion.
• C) Aggregate demand will increase until both short- run and long- run aggregate supply equal $13 trillion.
• D) Money wage rates will rise until real GDP is $12.6 trillion.

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Definitions:

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Symbolic Interaction Theory

A framework in sociology that focuses on the meanings individuals ascribe to objects, events, and behaviors, stemming from social interaction.

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Bureaucracy's Other Face

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