If the Economy Is Initially in Long-Run Equilibrium, Which Statement

question 122

Multiple Choice

If the economy is initially in long-run equilibrium, which statement best describes the effects of a shift in aggregate demand?

• A) Prices and output are affected in both the short and long run.
• B) Prices and output are affected only in the short run.
• C) Prices are affected in the long and short run, but output only in the short run.
• D) Prices are affected in the long and short run, but output only in the long run.

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Definitions:

Law-enforcing Power

Refers to the authority granted to designated bodies or officials to enforce laws, regulations, and maintain public order.

Executive Branch

The branch of government responsible for implementing and enforcing laws, typically headed by a president or prime minister.

Legislative Branch

The branch of government responsible for creating, amending, and repealing laws.

Judicial Branch

The branch of government responsible for interpreting the law and administering justice through courts and other judicial institutions.