If an Unanticipated Increase in Aggregate Demand Results in an Output

question 138

Multiple Choice

If an unanticipated increase in aggregate demand results in an output beyond the economy's long-run capacity, long-run equilibrium will eventually be restored by

• A) an increase in the economy's productive capacity (LRAS shifts to the right).
• B) higher resource prices, an increase in SRAS, and a decrease in the general level of prices.
• C) higher resource prices, a decrease in SRAS, and an increase in the general level of prices.
• D) a decrease in the natural rate of unemployment.

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Definitions:

Provides Constant Activity

Refers to any process or measure that ensures continuous engagement or action, maintaining a state of perpetual motion or operation.

Four Side Rails

A safety feature used on hospital beds involving rails on all four sides to prevent the patient from accidentally falling out of bed.

Falls

Accidental descents to the ground, which can cause injury, especially significant in older adults due to higher vulnerability.

Side Rails Down

The lowering of protective rails on a hospital bed to facilitate patient transfer or make the bed more accessible.