If a Demand Shock Causes the Economy to Move to a Real

question 115

Multiple Choice

If a demand shock causes the economy to move to a real GDP level that is below its full employment level,then

• A) we refer to this as a positive demand shock.
• B) the economy will remain at this point in the long run.
• C) the AS curve will adjust in the long run until the economy returns to full employment.
• D) the AD curve will move back to its original position in the long run.
• E) the unemployment rate will decline.

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