Suppose the Economy Is in Long-Run Equilibrium

question 21

Multiple Choice

Suppose the economy is in long-run equilibrium.If there is an increase in government purchases at the same time there is a large increase in the price of oil,then in the short-run

• A)real GDP will rise and the price level might rise,fall,or stay the same.
• B)real GDP will fall and the price level might rise,fall,or stay the same.
• C)the price level will rise,and real GDP might rise,fall,or stay the same.
• D)the price level will fall,and real GDP might rise,fall,or stay the same.

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