In a Short-Run Macroeconomic Equilibrium, Real GDP Exceeds Potential GDP

question 9

Multiple Choice

In a short-run macroeconomic equilibrium, real GDP exceeds potential GDP. If aggregate demand does not change, then the

• A) short-run aggregate supply curve will shift rightward as the money wage rate falls.
• B) short-run aggregate supply curve will shift leftward as the money wage rate rises.
• C) long-run aggregate supply curve will shift leftward as the money wage rate rises.
• D) long-run aggregate supply curve will shift leftward as the money wage rate falls.

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Definitions:

Economic Efficiency

A situation where resources are allocated in the most effective way possible, maximizing the potential for meeting needs and wants.

Poverty

A condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education, and information.

Low Incomes

Earnings that are below average or sufficient levels, potentially leading to poverty.

Youthful Inexperienced Workers

Young individuals entering the labor market with limited or no professional experience.