Suppose the Economy Is Currently in Long- Run Equilibrium with Real

question 78

Multiple Choice

Suppose the economy is currently in long- run equilibrium with real GDP equal to potential GDP. A positive demand shock, that is not validated by the Bank of Canada, will eventually result in

• A)an ongoing deflation in the economy.
• B)no change in the price level.
• C)a higher price level and GDP at potential output.
• D)a lower price level and real GDP below potential output.
• E)an ongoing inflation in the economy.

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Definitions:

Sodium

A chemical element, symbol Na, essential for human health, playing a key role in nerve function and fluid balance but excessive intake can lead to health issues.

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A chronic pain condition affecting the trigeminal nerve, causing intense facial pain.

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A type of nutritional plan consisting of foods that are easy to chew and swallow, often recommended for individuals with difficulty in eating.

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A condition characterized by difficulty in emptying the bowels, typically associated with hardened feces.