Suppose That the Economy Is in Long-Run Equilibrium and the Government

question 128

Multiple Choice

Suppose that the economy is in long-run equilibrium and the government decided to engage in unexpected expansionary policy by increasing the money supply. If we assume rational expectations, which of the following statements is correct about the effect of expansionary policy in the long run?

• A) The unemployment rate will increase, real GDP will increase and the price level will increase.
• B) The unemployment rate will decrease, real GDP will decrease and the price level will decrease.
• C) The unemployment rate will remain unchanged, real GDP will remain unchanged and the price level will increase.
• D) The unemployment rate will remain unchanged, real GDP will remain unchanged and the price level will decrease.

Understand standardization practices for institution-affiliated social media profiles.

Understand the Multiple Linkage Model and the influence of leadership on long-term and short-term group effectiveness.

Comprehend the Path-goal Theory of leadership and its implications for leader behavior and subordinate expectations and motivation.

Grasp Leader Substitutes Theory and how various elements can replace or diminish the need for hierarchical leadership.

---

Definitions:

Job Satisfaction

The degree of contentment or happiness that an individual has with their job, often influenced by factors such as work environment, tasks, and compensation.

Clear-Cut Division

A distinct separation or differentiation in roles, functions, or responsibilities within an organization or process.

Hierarchy Of Authority

A system within an organization where authority and power are ranked from the top (highest authority) to the bottom (lowest authority), determining how decisions flow through the organization.

Bureaucracy

An organizational system characterized by standardized procedures, hierarchical structure, and formal rules, often leading to efficiency at the cost of flexibility.