Suppose the Economy Was in Long-Run Equilibrium When a Sudden

question 2

Multiple Choice

Suppose the economy was in long-run equilibrium when a sudden decline in the stock market took place.What happens in the short run after the decline in the stock market?

• A) Both the price level and real GDP rise.
• B) The price level falls and real GDP does not change.
• C) The price level does not change and real GDP falls.
• D) Both the price level and real GDP fall.

---

Definitions:

Nasogastric Tube

A flexible tube inserted through the nose into the stomach, used for feeding or removing stomach contents.

Navel

The scar in the center of the abdomen, also known as the belly button, which marks the area where the umbilical cord was attached in utero.

Measurement Technique

A method or procedure used to quantify characteristics or parameters in a systematic and standard way, ensuring accuracy and reliability.

Cramping

Painful, involuntary muscle contractions that can occur in various parts of the body and are often caused by overuse, dehydration, or electrolyte imbalances.