Suppose That the Current Price Level Is 110, Real GDP

question 103

Multiple Choice

Suppose that the current price level is 110, real GDP is $100 billion, and long-run aggregate supply is $95 billion. We can conclude that

• A) the price level will fall until long-run aggregate supply shifts to $100 billion.
• B) the price level will fall and input prices will rise until real GDP pulls long-run aggregate supply up to $100 billion.
• C) input prices will rise until real GDP is $95 billion.
• D) aggregate demand will increase until both short-run and long-run aggregate supply equal $100 billion.

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Definitions:

Predation

The biological interaction where one organism, the predator, hunts and kills another organism, the prey, for food.

Competition

The rivalry between entities to achieve dominance, market share, or win resources, often driving innovation and efficiency.

Competition

The rivalry between individuals, businesses, or any entities that strive for the same objective or market.

Kitchen

A room or area where food is prepared and cooked, equipped with appliances and utensils.