Suppose Canada's Economy Is in a Long-Run Equilibrium with Real

question 91

Multiple Choice

Suppose Canada's economy is in a long-run equilibrium with real GDP equal to potential output.Now suppose there is an unexpected and sharp reduction in desired business investment expenditure.In the short run,________.In the long run,________.

• A)real GDP and the price level both fall; real GDP is at its original level with a lower price level
• B)real GDP and the price level both fall; real GDP is above its original level with a higher price level
• C)real GDP and the price level both rise; real GDP returns to its original level with a higher price level
• D)real GDP rises and the price level falls; real GDP returns to its original level with a lower price level
• E)real GDP falls and the price level rises; real GDP is below its original level with a higher price level

Learn the best practices for reducing data redundancy through database normalization.

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Understand the fundamental concepts of relational database design, including one-to-many relationships.

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Definitions:

Options

Financial derivatives that give the buyer the right, but not the obligation, to buy or sell an asset at a set price within a specific timeframe.

Forward Contracts

Financial derivatives that represent agreements to buy or sell an asset at a predetermined future date and price.

Futures Contracts

Agreements to buy or sell a particular commodity or financial instrument at a predetermined price at a specific time in the future.

Non-monetary Items

Items on the balance sheet that cannot be readily converted into cash and are not carried at their cash value, such as property, plant, and equipment.