Suppose the Economy Is in Long-Run Equilibrium

question 386

Multiple Choice

Suppose the economy is in long-run equilibrium. Concerns about pollution cause the government to significantly restrict the production of electricity. At the same time, the value of the dollar falls. 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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Definitions:

Inspection Time

The minimum time necessary to distinguish between two stimuli based on brief presentations.

Task Representation

The mental depiction and understanding of the tasks one is attempting to perform.

Task Concept

The understanding or model a person has about a specific task, including its goals, procedures, and outcomes.

Task Schema

A cognitive framework that helps organize and interpret information related to the specifics of performing a task or solving a problem.