The Economy Is in Long-Run Equilibrium When an MP Argues

question 70

Multiple Choice

The economy is in long-run equilibrium when an MP argues that the Bank of Canada should do more to fight unemployment. He argues that if the Bank of Canada increased the money supply faster, more workers would find jobs. How correct is the MP's argument?

• A)true for both the long run and the short run
• B)wrong for both the long run and the short run
• C)true for the short run but not the long run
• D)true for the long run but not the short run

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Definitions:

Legally Sufficient Consideration

Value that the law recognizes as adequate to form a binding contract, typically involving an exchange of goods, services, or promises.

Forbearance

The voluntary delay or suspension of an action, such as the enforcement of a debt obligation by a creditor.

Release

The act of freeing someone from obligation, restriction, or duty, or the act of making software, music, film, etc., available for the public.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party if the latter has reasonably relied on that promise to their detriment.