The Economy Is in Long-Run Equilibrium

question 22

Multiple Choice

The economy is in long-run equilibrium. Suppose that automatic teller machines become cheaper and more convenient to use, and as a result the demand for money falls. Other things being equal, what would we expect will happen to the price level and real GDP in the short and long run?

• A) In the short run, the price level and real GDP would rise, but in the long run they would both be unaffected.
• B) In the short run, the price level and real GDP would rise, but in the long run the price level would rise and real GDP would be unaffected.
• C) In the short run, the price level and real GDP would fall, but in the long run they would both be unaffected.
• D) In the short run, the price level and real GDP would fall, but in the long run the price level would fall and real GDP would be unaffected.

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Definitions:

Paternal Age

Paternal age refers to the age of a father at the time of his child's birth, which research indicates can influence genetic mutations and the risk of certain disorders in offspring.

Psychological Disorders

are mental health disorders characterized by disturbances in thoughts, feelings, and behaviors, leading to significant distress or impairment in daily functioning.

Schizophrenia

A chronic and severe mental disorder that affects how a person thinks, feels, and behaves, often leading to hallucinations, delusions, and disordered thinking.

Progestin

A hormone that is used to maintain pregnancy and can also cause masculinization of the fetus.