Suppose the Economy Is in Long-Run Equilibrium

question 13

Multiple Choice

Suppose the economy is in long-run equilibrium. Senator A succeeds in getting taxes raised. At the same time, Senator B succeeds in getting major new restrictions on logging enacted. 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:

Contemplation

The action of looking thoughtfully at something for a long time or thinking about something deeply.

Probate

The judicial process in which a will is proven in a court of law to be valid or invalid, and the legal process of administering the estate of a deceased person.

Bailment Contract

An agreement where personal property is transferred from the bailor to the bailee for a specific purpose, with the expectation of return.

Bailee Liability

refers to the legal responsibility of a bailee (a person or entity who temporarily holds property belonging to another) to take reasonable care of the goods in their custody.