Scenario 33-2 Imagine That in the Current Year the Economy Is in Is

question 77

Multiple Choice

Scenario 33-2
Imagine that in the current year the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time.
-Refer to Scenario 33-2. How is the new long-run equilibrium different from the original one?

• A)The price level and real GDP are higher.
• B)The price level and real GDP are lower.
• C)The price level is higher and real GDP is the same.
• D)The price level is the same and real GDP is higher.

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Definitions:

Cytokinin

Plant hormone that promotes cell division; often works in combination with auxin during organ development in plant embryos.

Gibberellin

A group of plant hormones that stimulate stem elongation, germination, and flowering.

Ethylene

Plant hormone that causes ripening of fruit and is also involved in abscission.

Abscisic Acid

A plant hormone that regulates growth and development, as well as stress responses such as closing stomata during drought conditions.