The Economy Is in Both a Short- and Long-Run Equilibrium

question 15

Multiple Choice

The economy is in both a short- and long-run equilibrium if:

• A) current inflation equals expected inflation and current output equals potential output.
• B) the aggregate demand curve intersects the short-run aggregate supply curve.
• C) the long-run aggregate supply curve is at potential output.
• D) the short-run aggregate supply curve intersects the long-run aggregate supply curve at potential output.

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Definitions:

Navigate Novel Situations

The ability to understand, manage, and adapt to new and unknown circumstances effectively.

Vernon's Hierarchal Model

A psychological theory that organizes intelligence into a hierarchy, with g (general intelligence) at the top, followed by two major group factors of verbal-educational and spatial-mechanical abilities.

Intelligence

The ability to learn from experience, solve problems, and use knowledge to adapt to new situations.

Verbal-Numerical

Relating to or involving both words and numbers, often in the context of testing or assessments that measure verbal and mathematical abilities.