Suppose the Economy Is in Long-Run Equilibrium

question 14

Multiple Choice

Suppose the economy is in long-run equilibrium. In a short span of time, there is a large influx of skilled immigrants, a major new discovery of oil, and a major new technological advance in electricity production. In the short run, we would expect

• A) the price level to rise and real GDP to fall.
• B) the price level to fall and real GDP to rise.
• C) the price level and real GDP both to stay the same.
• D) All of the above are possible.

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Definitions:

Supply Chain Costs

Supply Chain Costs encompass all expenses incurred in the creation and delivery of a product, from procurement of raw materials to transportation, handling, storage, and distribution.

Off-Peak Periods

Times when demand for a product or service is lower than usual, often leading to lower prices or rates as incentives.

Peak Periods

Peak periods are times of high demand or activity within a business or system, often requiring additional resources to meet customer needs or service levels.

Shifting Demand

Refers to the movement or change in consumer demand for a product or service over time, often influenced by factors such as seasonal changes, price fluctuations, and changes in consumer preferences.