Based on the Figure, the Economy Is Initially in Long-Run

question 104

Multiple Choice

Based on the figure, the economy is initially in long-run equilibrium at point A If there is a favorable supply shock that increases potential output and shifts the long-run aggregate supply curve from LRAS to LRAS', then the new long-run equilibrium is reached at point:

• A) E
• B) B
• C) C
• D) D

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Definitions:

India

A country in South Asia, known for its diverse culture, deep historical roots, and as the world's largest democracy.

Slave Economies

were economic systems that relied heavily on slave labor, particularly prevalent in the Americas before the abolition of slavery.

Cuba

An island nation in the Caribbean known for its significant history, including Spanish colonization, a communist revolution in 1959, and tense relations with the United States.

Brazil

The largest country in both South America and Latin America, known for its rich cultural heritage, biodiversity, and significant economic growth.