Suppose the Economy Begins in a Long- Run Equilibrium with Y

question 19

Multiple Choice

Suppose the economy begins in a long- run equilibrium with Y = Y*. A permanent increase in aggregate demand will have its short- run effect on real GDP reversed in the long run with a shift of _ .

• A)leftward; the aggregate demand curve
• B)rightward; the aggregate demand curve
• C)leftward; the aggregate supply curve
• D)rightward; the aggregate supply curve
• E)rightward; Y*

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Definitions:

Stereotype Threat

The effect of a negative stereotype about one’s self upon one’s own test performance.

Inequality

The state of not being equal, especially in status, rights, and opportunities; discrepancies in resources and power within a society.

Culturally Specific

Pertaining to or characteristic of a particular culture, indicating that certain practices, beliefs, or preferences are unique to that culture.

Biologically

Pertaining to the science of life or living organisms, often focusing on the genetic and physiological characteristics that define humans and other living beings.