Starting from Short-Run Equilibrium,the Following Occurs: Individuals Expect Higher (Future)incomes

question 33

Multiple Choice

Starting from short-run equilibrium,the following occurs: individuals expect higher (future) incomes and wage rates rise.What is the effect on the price level and Real GDP in the short run?

• A) The price level rises and Real GDP rises.
• B) The price level falls and Real GDP falls.
• C) The price level rises,but the effect on Real GDP cannot be determined.
• D) Real GDP rises,but the effect on the price level cannot be determined.
• E) Real GDP falls,but the effect on the price level cannot be determined.

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Definitions:

Offensive

Relating to something that causes someone to feel hurt, angry, or upset; also can refer to an attacking action in a military or sports context.

Persistently Preoccupy

To occupy the mind continuously or for a prolonged period with a particular thought or problem, making it difficult to focus on other things.

Obsessive-Compulsive Disorder

A mental disorder where people feel the need to check things repeatedly, perform certain routines repetitively, or have certain thoughts persistently.

Intrusive

Unwanted or disturbing thoughts, impulses, or images that enter the mind, causing significant anxiety or discomfort, typically associated with conditions like OCD.