If the Economy Is in Long Run Equilibrium and Aggregate

question 276

Multiple Choice

If the economy is in long run equilibrium and aggregate demand increases, then in the short run

• A) nothing happens because the economy is in long run equilibrium.
• B) the price level rises and real GDP does not change.
• C) real GDP increases and the price level does not change.
• D) the price level rises and real GDP increases.

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Definitions:

Established Patterns

Predefined or widely recognized ways in which processes, behaviors, or activities are conducted within a particular context.

Bureaucratic Social Structures

Organized systems of administration in societies or organizations, characterized by hierarchical positions and written rules.

Behavior

The actions or reactions of an object or organism, usually in relation to the environment or surrounding.

Breakdown Theory

A sociological theory suggesting that social breakdown and disorganization lead to the emergence of deviant behavior and social problems.