Suppose That the Economy Is in a Position of Short-Run

question 25

Multiple Choice

Suppose that the economy is in a position of short-run equilibrium at a point where real GDP is below the full-employment level. Assuming no further change in aggregate demand and self-correction, the movement to a new long-run equilibrium includes a decrease in which of the following?

• A) The unemployment rate.
• B) The price level (CPI).
• C) The level of nominal wages and salaries.
• D) All of the above.

---

Definitions:

Modern Humans

Homo sapiens, the species of hominids that represents the current form of humans characterized by advanced cognitive abilities and culture.

Chordates

A large phylum of animals that includes all vertebrates and some invertebrates, characterized by having a notochord at some stage in their development.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brainstem down the back, and is encased in the vertebral column, transmitting nerve signals between the brain and the rest of the body.

Brain

The organ located in the head of an animal that coordinates its behavior, processes sensory information, and is the center of perception, memory, thought, and emotion.