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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