The Long-Run Adjustment to a Negative Supply Shock Results in

question 137

Multiple Choice

The long-run adjustment to a negative supply shock results in

• A)the short-run aggregate supply curve shifting to the right.
• B)the price level rising.
• C)unemployment rising.
• D)workers being willing to accept higher wages.

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Definitions:

Positive

Characterized by or displaying affirmation, constructive attributes, or optimism; also in economics, indicating numbers or conditions above zero or in surplus.

Complementary Goods

Products or services that are typically consumed together, as the consumption of one enhances the value or desire for the other.

Normal Good

A category of product that sees a rise in demand when consumer incomes go up, and a decrease when incomes fall.

Cross Elasticity of Demand

A measure of how the quantity demanded of one good responds to a change in price of another good, indicating the degree of substitutability between the two goods.