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:

Quantitative Research

A research methodology that focuses on quantifying the collection and analysis of data through objective measurement and statistical analysis.

Qualitative Research

A research method focusing on understanding concepts, thoughts, and experiences through collection of non-numeric data like interviews, observations, and texts.

Complementary

Describes things that enhance or improve each other when combined, often due to their contrasting qualities.

Qualitative Researchers

Individuals who engage in the systematic investigation of social phenomena by employing qualitative research methods aimed at providing a deep understanding of people's experiences and social processes.