Use the Following to Answer Questions

question 132

Multiple Choice

Use the following to answer questions .
Exhibit: Economic Growth, AD and AS Analysis
-(Exhibit: Economic Growth, AD and AS Analysis) Assume that the economy is initially in long-run equilibrium. If oil prices in the economy increased dramatically and remained high for so long that most of the industries in the economy had to significantly form new capital and retool much of its existing capital, the economy would suffer. In this event,

• A) the long-run aggregate supply and the short-run aggregate supply curves would shift left, reducing the future industrial capacity and prospects for economic growth.
• B) the aggregate demand curve would shift left, reducing the future industrial capacity and prospects for economic growth.
• C) only the short-run aggregate supply curve would shift left, permanently reducing the economy's potential output.
• D) the long-run aggregate supply, the short-run aggregate supply, and the aggregate demand curves would shift left, sending the economy into a long recession.

---

Definitions:

Learning Style

The preferred method or approach an individual uses to learn and process information, such as visual, auditory, kinesthetic, etc.

Term Papers

Research papers written by students over an academic term, accounting for a large part of a grade.

Final Exams

End-of-course tests that evaluate a student's understanding and mastery of the material covered throughout the semester or year.

Motivated Person

An individual who demonstrates a strong drive and eagerness to pursue goals or complete tasks.