Assume Equilibrium Real GDP Per Year Is Equal to Full-Employment

question 222

Multiple Choice

Assume equilibrium real GDP per year is equal to full-employment real GDP. If aggregate demand falls, then

• A) the price level will increase in the short run and decrease in the long run.
• B) there will be an expansionary gap.
• C) there will be a recessionary gap.
• D) long-run aggregate supply will eventually decrease too.

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Definitions:

Mental Health Care

The provision of services aimed at promoting psychological well-being and treating mental disorders.

Long-term Care

A variety of services designed to meet a person's health or personal care needs over a long period of time.

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The state or condition of being free from dependency on others or external control.

Ethnic Minority Groups

Social groups that are differentiated from the dominant groups in a society based on cultural, national, religious, linguistic, or racial characteristics.