Starting from the Initial Long-Run Equilibrium at Point a in the Diagram

question 38

Multiple Choice

Starting from the initial long-run equilibrium at point A in the diagram below,an adverse price shock which shifts up the SRAS curve to SRAS' will move the economy to point B,resulting in a temporary ___________ in output and a temporary ___________ in the price level.However,the working of the self-correcting mechanism will return the economy to ___________ in the long run.

• A) fall;rise;C
• B) fall;rise;A
• C) rise;fall;A
• D) rise;fall;C
• E) fall;fall;A

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Definitions:

Tertiary

Referring to the third level or stage in a sequence, system, or hierarchy.

Tapped

In electrical engineering, refers to creating a connection point at some location along a wire or winding of a transformer to draw off voltage.

Autotransformer

A type of electrical transformer with a single winding that acts as both the primary and the secondary winding, used for varying the level of voltage.

Primary

The initial or most important in order of development or consideration.