Suppose the Economy Is in Long-Run Equilibrium

question 14

Multiple Choice

Suppose the economy is in long-run equilibrium. In a short span of time, there is a large influx of skilled immigrants, a major new discovery of oil, and a major new technological advance in electricity production. In the short run, we would expect

• A) the price level to rise and real GDP to fall.
• B) the price level to fall and real GDP to rise.
• C) the price level and real GDP both to stay the same.
• D) All of the above are possible.

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Definitions:

Integer Models

Mathematical models in operations research where the solution variables are required to be integers, often used in decision-making for optimal allocation and scheduling.

Continuous Nature

Characteristic of processes, functions, or variables that are uninterrupted and not discrete, allowing for an infinite number of possible values.

New Price

The updated or current cost of a product or service as adjusted over time or due to various factors.

Total Revenue

The total amount of income generated by the sale of goods or services related to a company's primary operations.