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

question 81

Multiple Choice

If a short-run equilibrium occurs at a level of output below 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

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Definitions:

Shared Environment

Aspects of the environment that individuals living together share and that contribute to making them similar in behavior and traits.

Family Background

The social, economic, and familial environment a person is raised in, which can influence their development and life choices.

Secret Lives

Aspects of an individual's life or experiences that they keep hidden from others, often due to fear of judgment or misunderstanding.

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An act of breaking or disregarding established rules or norms within a specific context or environment.