The World Goes into an Expansion

question 47

Multiple Choice

The world goes into an expansion.Starting from a position of long- run equilibrium, what effect does this event have on Canada's economy in the short run?

• A)Real GDP increases and the price level rises.
• B)Real GDP decreases and the price level falls.
• C)Real GDP increases and the price level falls.
• D)Real GDP decreases and the price level rises.
• E)There is no change in either real GDP or the price level.

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Definitions:

Implied Authority

Authority of an agent that is not expressly granted but is assumed to be necessary to perform the duties assigned.

Express Statements

Explicit and direct expressions or declarations made verbally or in writing.

Agent

An individual or organization empowered to represent another party (known as the principal) in transactions with third parties.

Principal

The original sum of money borrowed in a loan, or the amount of the investment before earnings or losses.