If an Economy Is in Short-Run Equilibrium and the Level

question 177

Multiple Choice

If an economy is in short-run equilibrium and the level of actual real GDP is greater than potential output,in the long run nominal wages will _____ and the _____ curve will shift _____,bringing the economy back to its potential real GDP.

• A) rise;SRAS;left
• B) rise;AD;right
• C) fall;SRAS;right
• D) fall;AD;left

---

Definitions:

Enforceable

A term describing a contract or legal obligation that is legally binding and can be upheld in court.

Junk Bonds

High-risk, high-yield bonds issued by companies considered to be at greater risk of default.

Government Bonds

Debt securities issued by a government to finance its borrowing requirements, offering a fixed or variable interest rate payable to holders.

Dividends

Payments made by a corporation to its shareholder members from its profits or reserves.