-In the Above Figure, If We Start at and

question 36

Multiple Choice

-In the above figure, if we start at and , and the money supply increases unexpectedly, what causes the economy to get to the long-run equilibrium?

• A) People's expectations will revise after a short-run gain in output, wages will fall, and SRAS will shift leftward.
• B) People's expectations will revise after a short-run gain in output, wages will rise, and SRAS will shift rightward.
• C) People's expectations will revise after a short-run loss in output, wages will fall, and SRAS will shift leftward.
• D) People's expectations will revise after a short-run gain in output, wages will rise, and SRAS will shift leftward.

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Definitions:

Developing Countries

Nations with a lower level of industrialization, lower living standards, and a lower Human Development Index (HDI) relative to other countries.

Illnesses

Health conditions characterized by the impairment of an individual's normal physiological function.

Acid Rain

Precipitation that is significantly more acidic than normal, caused by emissions of sulfur dioxide and nitrogen oxide from industrial activities, which can damage forests, lakes, and buildings.

Global Warming

The gradual increase in the Earth's surface temperature, attributed largely to the greenhouse gas emissions from human activities.