Starting from Long-Run Equilibrium in the Dynamic Model of Aggregate

question 51

Multiple Choice

Starting from long-run equilibrium in the dynamic model of aggregate demand and aggregate supply, a temporary five-period tax increase causes output to _____ returning to the natural level in the long run.

• A)remain continuously above the natural level of output until
• B)move above and then below the natural level of output until
• C)remain continuously below the natural level of output until
• D)move below and then above the natural level of output before

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Definitions:

Angina

Chest pain or discomfort caused by reduced blood flow to the heart muscle.

Chest Pain

A discomfort or pain that one feels anywhere along the front of the body between the neck and upper abdomen.

Heart-Related

Pertains to any conditions, disorders, or diseases that affect the heart's function.

Azygos Vein

A vein running up the right side of the vertebral column that drains blood from the chest wall and upper limbs back to the heart.