Suppose That the Economy Is in Long-Run Macroeconomic Equilibrium and Aggregate

question 181

Multiple Choice

Suppose that the economy is in long-run macroeconomic equilibrium and aggregate demand increases. As the economy moves to short-run macroeconomic equilibrium, there is a(n) _____ gap with _____.

• A) recessionary; high inflation
• B) recessionary; low inflation
• C) inflationary; high unemployment
• D) inflationary; low unemployment

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Definitions:

Poverty

The state of having insufficient financial resources or access to necessities of life such as food, clean water, and shelter.

Unbalanced Diet

A diet lacking in the appropriate mix of nutrients to maintain health.

Global Environmental Security

A concept involving the protection of the global environment to ensure the stability and safety of international communities and ecosystems.

Poverty

The state of having insufficient financial resources to meet basic living needs such as food, shelter, and healthcare, leading to a lower quality of life.