Suppose the Economy Is in Long-Run Equilibrium and the Government

question 51

Multiple Choice

Suppose the economy is in long-run equilibrium and the government decreases its expenditures.Which of the following helps explain the logic of why the economy moves back to long-run equilibrium?

• A)as people revise their price-level expectations upward,firms and workers strike bargains for higher nominal wages.
• B)as people revise their price-level expectations upward,firms and workers strike bargains for lower nominal wages.
• C)as people revise their price-level expectations downward,firms and workers strike bargains for higher nominal wages.
• D)as people revise their price-level expectations downward,firms and workers strike bargains for lower nominal wages.

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Definitions:

Middle-aged White Men

Males of Caucasian ethnicity typically in the age range of 45 to 65 years.

Intrinsic Motivator

An internal drive that compels individuals to act based on inner rewards, passion, or interest, without external incentives.

Intellectual Ability

The capacity to think, learn, and make sense of the world through mental processes, reasoning, and problem-solving.

Peer Pressure

Influence from members of one's peer group to adopt certain behaviors, values, or conform to group norms.