In the Long-Run ISLM Model and with Everything Else Held

question 28

Multiple Choice

In the long-run ISLM model and with everything else held constant,as long as the level of output ________ the natural rate level,the price level will continue to ________,shifting the LM curve to the ________,until finally output is back at the natural rate level.

• A)exceeds;rise;right
• B)exceeds;rise;left
• C)remains below;fall;left
• D)remains below;rise;right

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Definitions:

Constrained Machine

A piece of equipment within a manufacturing process that limits the total output due to its capacity or throughput level.

Constrained Resource

A limiting factor or scarce resource that restricts the output or productivity of a manufacturing or business process.

Profitable Product

A product that generates revenue exceeding its costs of production and distribution, leading to a profit.

Intermediate Calculations

Calculations performed as part of a more extensive analysis or accounting process, often necessary for deriving final results or conclusions.