The Economy Is in Long-Run Equilibrium When There Is an Incorrectly

question 63

Multiple Choice

The economy is in long-run equilibrium when there is an incorrectly anticipated increase in aggregate demand brought about by expansionary monetary policy.Specifically,aggregate demand increases by more than people anticipate (bias downward) .According to new classical theory,the price level will __________ and Real GDP will __________ in the short run.In the long run,the price level will be __________ than it was before aggregate demand increased.

• A) rise; fall; higher
• B) rise; rise; higher
• C) fall; rise; lower
• D) fall; rise; higher
• E) rise; rise; lower

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Definitions:

Acute Stress Disorder

A mental health condition that occurs within a month after exposure to a traumatic event, characterized by symptoms such as flashbacks, numbing, and increased anxiety.

Depersonalization Disorder

A mental disorder characterized by persistent or recurrent feelings of detachment from one's own body or thoughts, feeling like an outside observer of oneself.

Mental Processes

The internal cognitive operations that enable consciousness, thinking, reasoning, perception, and emotion, underpinning human behavior and interactions.

Dissociative Identity Disorder

A mental health condition where a person experiences two or more distinct and relatively enduring personality states.