Suppose the Economy Is in Long-Run Equilibrium

question 199

Multiple Choice

Suppose the economy is in long-run equilibrium. If there is a sharp increase in the minimum wage as well as an increase in pessimism about future business conditions, then we would expect that in the short-run,

• A)real GDP will rise and the price level might rise, fall, or stay the same.
• B)real GDP will fall and the price level might rise, fall, or stay the same.
• C)the price level will rise, and real GDP might rise, fall, or stay the same.
• D)the price level will fall, and real GDP might rise, fall, or stay the same.

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Definitions:

Erikson

Psychologist Erik H. Erikson developed a theory of psychological development that identifies eight stages from infancy to adulthood, each characterized by a central conflict.

Continuous Development

A perspective on human development which sees changes as gradual and incremental, without sudden shifts or distinct stages.

Discontinuous Development

The concept that development occurs in distinct stages that are qualitatively different from each other rather than as a smooth, continuous progression.

Nature

The inherent qualities or characteristics of a person or thing; frequently contrasted with nurture, or environmental influences.