Suppose an Economy Is Initially in Long-Run Equilibrium, and It

question 199

Multiple Choice

Suppose an economy is initially in long-run equilibrium, and it then experiences a supply shock in the form of exceptionally high energy prices. Which of these will be true in this economy?

• A) The short-run aggregate supply curve will shift leftward, and the long-run supply curve will shift rightward.
• B) The short-run aggregate supply curve and the long-run aggregate supply curve will shift rightward.
• C) The short-run aggregate supply curve will not shift, and the long-run aggregate supply curve will shift rightward.
• D) The short-run aggregate supply curve will shift rightward, but the long-run aggregate supply curve will not shift.
• E) The short-run aggregate supply curve and the long-run aggregate supply curve will shift leftward.

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Definitions:

Understand the World

Refers to the cognitive process of comprehending, interpreting, and making sense of the complex reality around us.

Rep Test

The Repertory Grid Technique, a tool for exploring the ways individuals classify and interpret their world, often used in personal construct psychology.

Precarious Assumptions

Risky or uncertain beliefs that are accepted without solid evidence or secure foundations.

Constructs Listed

The specified elements or variables within a study or theory that have been identified for analysis or measurement.