Beginning from a Position of Long-Run Equilibrium,suppose There Is an Increase

question 34

Multiple Choice

Beginning from a position of long-run equilibrium,suppose there is an increase in the aggregate demand curve.After adjustment and comparing the economy's new long-run equilibrium with its original long-run position,the result would be an increase in:

• A) real GDP.
• B) the price level (CPI).
• C) the unemployment rate.
• D) a and b, but not

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Definitions:

Utility Function

A mathematical representation that defines the level of satisfaction or utility that a consumer derives from consuming certain goods or services.

Consumption

The use of goods and services by households or individuals, leading to the satisfaction of their wants and needs.

Lottery

A method of distributing something (usually money or prizes) among a group of people by lot or by chance.

Interest Rate

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, usually on an annual basis.