Suppose the Economy Was in Long-Run Equilibrium When a Sudden

question 2

Multiple Choice

Suppose the economy was in long-run equilibrium when a sudden decline in the stock market took place.What happens in the short run after the decline in the stock market?

• A) Both the price level and real GDP rise.
• B) The price level falls and real GDP does not change.
• C) The price level does not change and real GDP falls.
• D) Both the price level and real GDP fall.

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Interest And Principal

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A sequence of identical installments paid at the start of successive periods across a predetermined duration.

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