Suppose the Economy Is Initially in Long-Run Equilibrium

question 140

Multiple Choice

Suppose the economy is initially in long-run equilibrium.Which of the following best describes the effects of a shift in aggregate demand?  

• A) Prices and output are affected in the short run and in the long run. 
• B) Prices and output are affected only in the short run. 
• C) Prices are affected in the long run and in the short run, but output is affected only in the short run. 
• D) Prices are affected in the long run and in the short run, but output is affected only in the long run.

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Definitions:

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

Freudian Psychoanalysis

A psychological theory and therapy method developed by Sigmund Freud that emphasizes unconscious motivations and conflicts as determinants of human behavior.

Humanistic Philosophy

A philosophical approach that emphasizes the personal worth of the individual and the centrality of human values.

Contingency Management

A form of behavior therapy in which certain behaviors are reliably followed by well-defined consequences.