Suppose the Economy Is in Long-Run Equilibrium

question 263

Multiple Choice

Suppose the economy is in long-run equilibrium.In a short span of time,there is a sharp decline in the stock market,a tax cut,an increase in the money supply and a decline in the value of the dollar.In the short run,we would expect

• A)the price level and real GDP both to rise.
• B)the price level and real GDP both to fall.
• C)the price level and real GDP both to stay the same.
• D)All of the above are possible.

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Definitions:

Hypertension

A chronic medical condition in which the blood pressure in the arteries is persistently elevated, often leading to serious health issues.

Auditory Hallucinations

The experience of hearing sounds, often voices, that are not present in the external environment, frequently associated with mental health disorders like schizophrenia.

Schizophrenia

A mental disorder characterized by distortions in thinking, perception, emotions, language, sense of self, and behavior.

Overdose

Consuming an excessive amount of a substance, surpassing safe or prescribed levels, which can lead to toxic reactions and potentially life-threatening situations.