Suppose That the Economy Is in a Position of Short-Run

question 25

Multiple Choice

Suppose that the economy is in a position of short-run equilibrium at a point where real GDP is below the full-employment level. Assuming no further change in aggregate demand and self-correction, the movement to a new long-run equilibrium includes a decrease in which of the following?

• A) The unemployment rate.
• B) The price level (CPI).
• C) The level of nominal wages and salaries.
• D) All of the above.

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Definitions:

Markdown

A reduction from the original or listed price of a product, typically to stimulate sales or clear inventory.

Discounting

The practice of reducing the price of goods or services, typically to attract customers or move excess inventory.

Enhance Customer Perceptions

Strategies aimed at improving how consumers view and evaluate a company's products or services.

Markdowns

Reductions in the selling price of goods, often to clear old stock or respond to reduced demand.