Following Any AD or AS Shock, Economists Typically Assume That

question 11

Multiple Choice

Following any AD or AS shock, economists typically assume that the adjustment process continues until

• A)the output gap is at a stable level.
• B)factor prices have returned to their levels previous to the shock.
• C)Y* adjusts to its long- run equilibrium level.
• D)the AD and AS curves intersect each other at the correct price level.
• E)real GDP returns to Y*.