Suppose the Economy Is in Long-Run Equilibrium

question 220

Multiple Choice

Suppose the economy is in long-run equilibrium. If there is a tax cut at the same time that major new sources of oil are discovered in the country, what would we expect will happen 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:

Self-Efficacy

The belief that one can master a situation and produce positive change.

Implementation Intentions

"Specific strategies for dealing with the challenges of making a life change."

Religious Participation

The act of engaging in activities associated with a religious community, such as attending services, prayer, or study, often reflecting a component of personal identity and beliefs.

Healthier Life

A way of living that incorporates habits and behaviors aimed at improving well-being and reducing the risk of disease.