If an Economy Operates at a Short-Run Equilibrium Output That

question 163

Multiple Choice

If an economy operates at a short-run equilibrium output that exceeds its long-run capacity, which of the following will be most likely to direct the economy toward full employment?

• A) Improvements in technology will shift the LRAS curve to the right.
• B) Resource prices will increase, causing the SRAS curve to shift to the left.
• C) The unemployment rate will increase, causing the economy's aggregate supply curve to shift to the right.
• D) Interest rates will decline, shifting the aggregate demand curve to the right.

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Definitions:

Regular Basis

A recurring or habitual schedule or frequency at which an action or event occurs.

Phased Retirement

Describes a work arrangement allowing employees to gradually reduce their working hours as they approach retirement, often to balance personal needs and organizational demands.

Old Age Security (OAS)

a government-sponsored pension plan designed to provide a monthly income to senior citizens, aiming to ensure they can maintain a basic standard of living in retirement.

Internet Usage

The activities and behaviors of individuals while online, encompassing various actions like browsing, shopping, communicating, and information gathering.