A Candidate for Political Office Announces the Following Policies Which

question 14

Multiple Choice

A candidate for political office announces the following policies which, he says, economics clearly demonstrates will lead to higher output in the long run: 1. increase immigration from abroad 2. make trade more open between the US and other countries.

• A) 1 and 2 both shift long-run aggregate supply right.
• B) 1 and 2 both shift long-run aggregate supply left.
• C) 1 shifts long-run aggregate supply right, 2 shifts long-run aggregate supply left.
• D) 1 shifts long-run aggregate supply left, 2 shifts long-run aggregate supply right.

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Definitions:

Equilibrium Quantity

At the market price, the amount of goods or services available perfectly matches the amount consumers want to buy.

Simultaneous Increase

A scenario where two or more variables or quantities rise at the same time.

Demand For

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specific period.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to a stable market condition.