From a Long-Run Equilibrium with P = Pe = 0,suppose

question 155

Multiple Choice

From a long-run equilibrium with p = pe = 0,suppose x rises permanently to 8 and pe never rises from zero.The economy will come to rest

• A)on its LP curve with p = 8.
• B)at p = 0 and Y = 108.
• C)back at p = 0 and Y = 100.
• D)on its SP curve at p = 8.
• E)on its SP curve at p = 4 and Y = 104.