If There Is a Positive Demand Shock,which of the Following

question 110

Multiple Choice

If there is a positive demand shock,which of the following would represent the most likely short and long-run outcomes? (Assume the economy was initially at full employment)

• A) In the short run,real GDP and the price level would increase;in the long run,real GDP would return to its original level while the price level would rise even further.
• B) In the short run,real GDP and the price level would increase;in the long run,real GDP and the price level would return to their original level.
• C) In the short run,real GDP would increase and the price level would decrease;in the long run,real GDP would return to its original level while the price level would rise even further.
• D) In the short run,real GDP and the price level would decrease;in the long run,real GDP would return to its original level while the price level would rise even further.
• E) In the short run,real GDP and the price level would increase;in the long run,real GDP would increase while the price level would return to its original level.

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Definitions:

Glucose

An essential energy-providing simple sugar found in living entities and a constituent of a wide variety of carbohydrates.

Hemiacetal

A functional group formed by the reaction of an aldehyde with an alcohol, consisting of a carbon atom bonded to an OH and an OR group.

Carbonyl Group

A functional group found in organic compounds, consisting of a carbon atom double-bonded to an oxygen atom (C=O), characteristic of ketones, aldehydes, carboxylic acids, and esters.

Methylene Group

A bivalent functional group (-CH2-) consisting of a carbon atom bonded to two hydrogen atoms.