Starting from an Initial Long-Run Equilibrium, an Unanticipated Shift to a More

question 154

Multiple Choice

Starting from an initial long-run equilibrium, an unanticipated shift to a more expansionary monetary policy would tend to increase

• A) prices and unemployment in the long run.
• B) real output in the short run but not in the long run.
• C) real output in the long run but not in the short run.
• D) real output in both the long run and the short run.

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Definitions:

Glucose

A simple sugar that is an important energy source in living organisms and is a component of many carbohydrates.

Incentive

A thing that motivates or encourages someone to do something, often seen as a reward.

Sleep

A naturally recurring state of mind and body characterized by altered consciousness, relatively inhibited sensory activity, and inhibition of nearly all voluntary muscles.

Drive

An internal motivational state created by physiological or psychological needs that drives behavior towards goals or necessities.