If the Economy Is Initially in Short-Run Equilibrium and Then

question 32

Multiple Choice

If the economy is initially in short-run equilibrium and then experiences a positive demand shock,real GDP will ________ relative to potential GDP and the real interest rate will ________.

• A) increase; increase
• B) increase; decrease
• C) decrease; increase
• D) decrease; decrease

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Definitions:

Substance

Refers to the core content, main elements, or essential components of a discussion, agreement, or study.

Imposed Solutions

Solutions or agreements forced upon parties involved in a negotiation or conflict, often without their consent.

Potential Solutions

Possible answers, remedies, or methods to address or resolve a problem or challenge.

Latter Part

The final section or segment of a particular period, document, discussion, or series of events.