Suppose the Economy Is in Long-Run Equilibrium

question 454

Multiple Choice

Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a significant increase in immigration of skilled workers, then in the short run,

• A)real GDP will rise and the price level might rise, fall, or stay the same. In the long-run, real GDP will rise and the price level might rise, fall, or stay the same.
• B)the price level will fall, and real GDP might rise, fall, or stay the same. In the long-run, real GDP and the price level will be unaffected.
• C)the price level will rise, and real GDP might rise, fall, or stay the same. In the long run, real GDP will rise and the price level will fall.
• D)the price level will fall, and real GDP might rise, fall, or stay the same. In the long run, real GDP will rise and the price level will fall.

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Definitions:

Sales Discounts

A reduction in the price of a product or service that is offered by the seller, often to prompt early payment or bulk purchases.

Sales Returns

Transactions involving the return of sold goods by customers, resulting in a reduction of revenue.

Charge Customer

The process of billing a customer for goods or services provided.

Sales Discounts

A reduction in the price of goods or services offered by a seller to a buyer, usually to encourage prompt payment.