When Economic Growth (A Gradual Shift of LRAS to the Right)

question 122

Multiple Choice

When economic growth (a gradual shift of LRAS to the right) expands the production possibilities of an economy,

• A) a higher rate of real output can be achieved in the short run, but it cannot be sustained in the long run.
• B) a larger output can be attained even if unemployment remains at its natural rate.
• C) the general level of prices will rise if the money supply is held constant.
• D) the equilibrium in the goods and services market will be disrupted.

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