Beginning from Short-Run Equilibrium at Point E₂ in Exhibit 1

question 37

Multiple Choice

Beginning from short-run equilibrium at point E₂ in Exhibit 1, the economy's movement to a new position of long-run equilibrium would best be described as:

• A)a movement along the AD₂ curve with a shift in the SRAS₁ curve.
• B)a movement along the SRAS₂ curve with a shift in the AD₂ curve.
• C)a shift in the LRAS curve to an intersection at E₁.
• D)no shift of any kind.

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Definitions:

Mesosphere

The third layer of Earth's atmosphere, located above the stratosphere and below the thermosphere, characterized by decreasing temperatures with altitude.

Stratosphere

The layer of Earth's atmosphere located above the troposphere and below the mesosphere, known for containing the ozone layer.

Solar Activity

The phenomena that occur within the Sun's magnetically charged atmosphere, affecting space weather and climatic conditions on Earth.

Air

The invisible gaseous substance surrounding the Earth, a mixture mainly of oxygen and nitrogen.