Suppose the Economy Is in Long-Run Equilibrium

question 82

Multiple Choice

Suppose the economy is in long-run equilibrium. In a short span of time, there is a large influx of skilled immigrants, a major new discovery of oil, and a major new technological advance in electricity production. In the short run, what would we expect to happen?

• A) The price level will rise, and real GDP will fall.
• B) The price level will fall, and real GDP will rise.
• C) The price level and real GDP will both stay the same.
• D) The price level and real GDP will both fall.

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