Scenario 14-1

question 73

Multiple Choice

Scenario 14-1. The economy is in long-run equilibrium. Suddenly, due to improved international relations and the increased confidence of policymakers, citizens become more optimistic about the future and stay this way for a long time.
-Refer to Scenario 14-1. How does the new long-run equilibrium differ from the original one?

• A)Both the price level and real GDP are higher.
• B)Both the price level and real GDP are lower.
• C)The price level is the same and real GDP is higher.
• D)The price level is higher and real GDP is the same.

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Definitions:

Executive Agreements

International agreements entered into by the president that do not require Senate approval, often used in foreign policy.

Formal Treaties

Officially binding agreements between states or nations, governed by international law and formally ratified by the participating entities.

Senate

The upper legislative house in many bicameral parliamentary systems, often tasked with reviewing legislation passed by the lower house.

Delegated Powers

Powers that are explicitly given by the Constitution to the federal government or its branches, allowing it to perform its duties.