If the Economy Is in Long Run Equilibrium and Aggregate

question 295

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

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Definitions:

Natural Selection

The process by which organisms better adapted to their environment tend to survive and produce more offspring, a fundamental concept in evolutionary biology.

Fecundity

The potential reproductive capacity of an individual or population, often measured by the number of offspring produced.

Activation

The process of initiating action or the state of being active, often discussed in psychological and physiological contexts.

Parental Investment Model

A theory proposing that the extent and type of investment parents make in their offspring affects the offspring's survival and reproductive success.