Scenario 14-2 The Economy Is in Long-Run Equilibrium. Suddenly, Due to Corporate

question 96

Multiple Choice

Scenario 14-2
The economy is in long-run equilibrium. Suddenly, due to corporate scandals, international tensions, and the loss of confidence among policymakers, citizens become pessimistic concerning the future. They maintain this level of pessimism for a long time.
-Refer to the Scenario 14-2.In the long run,the change in price expectations caused by pessimism leads to which of the following shifts?

• A)Long-run AS shifts left.
• B)Long-run AS shifts right.
• C)Short-run AS shifts right.
• D)Short-run AS shifts left.

---

Definitions:

Hierarchy of Needs

A theory proposed by Abraham Maslow suggesting that people are motivated to fulfill basic needs before moving on to other, more advanced needs.

Sandwich Generation

A generation of people responsible for bringing up their own children and for the care of their aging parents.

Skipped Generation

Skipped generation refers to family situations where grandparents are the primary caregivers for their grandchildren, often due to the absence or incapacity of the parents.

Long-Term Romantic Partners

Individuals involved in a sustained romantic relationship characterized by emotional and often legal ties.