If a Short-Run Equilibrium Occurs at a Level of Output

question 98

Multiple Choice

If a short-run equilibrium occurs at a level of output above the natural rate, then in the transition to the long run prices will ______ and output will ______.

• A) increase; increase
• B) decrease; decrease
• C) increase; decrease
• D) decrease; increase

---

Definitions:

Poisson Probability Distribution

A discrete probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space, assuming these events occur with a known constant mean rate and independently of the time since the last event.

Binomial Probability Distribution

A probability distribution detailing the chances of a variable assuming one of two independent values based on specific parameters or assumptions.

Normal Probability Distribution

A bell-shaped probability distribution characterized by its mean and standard deviation, describing how random variables are distributed.

Total Area

The sum of all areas covered by a given shape or surface.