Suppose the Economy Is in Long-Run Equilibrium

question 112

Multiple Choice

Suppose the economy is in long-run equilibrium. If there is a sharp increase in the minimum wage as well as an increase in pessimism about future business conditions, what would we expect to happen in the short run?

• A) Real GDP will rise, and the price level might rise, fall, or stay the same.
• B) Real GDP will fall, and the price level might rise, fall, or stay the same.
• C) The price level will rise, and real GDP might rise, fall, or stay the same.
• D) The price level will fall, and real GDP might rise, fall, or stay the same.

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Definitions:

Legal Positivists

Scholars or jurists who believe that the validity of a law is not related to its morality but to its creation by a recognized legal authority.

Genuine Controversy

Genuine controversy refers to a real and substantial dispute or disagreement between parties, significant enough to justify judicial intervention and resolution by a court.

Ripe

In legal context, a matter that is ready for adjudication because all preliminary issues have been dealt with.

Legislative History

The recorded events, discussions, and documentation leading up to the passing of a law.