Suppose the Economy Is in Long-Run Equilibrium

question 158

Multiple Choice

Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a significant increase in immigration of skilled workers, what would we expect to happen?

• A) In the short run, real GDP will rise, and the price level might rise, fall, or stay the same. In the long-run, real GDP will rise, and the price level might rise, fall, or stay the same.
• B) In the short run, the price level will fall, and real GDP might rise, fall, or stay the same. In the long-run, real GDP and the price level will be unaffected.
• C) In the short run, the price level will rise, and real GDP might rise, fall, or stay the same. In the long run, real GDP will rise, and the price level will fall.
• D) In the short run, the price level will fall, and real GDP might rise, fall, or stay the same. In the long run, real GDP will rise, and the price level will fall.

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Definitions:

Equal Chance

The principle that all participants or elements in a given situation have the same likelihood or opportunity of experiencing a certain outcome.

Independent Variable

The factor or condition that researchers intentionally change to study its impact on an outcome.

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A stimulant and addictive substance found in tobacco, which increases dopamine levels in the brain.

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A virtual reality system designed to imitate the experience of driving a vehicle, used for training and research purposes.