Suppose the Current Situation Is Such That the Price Level

question 325

Multiple Choice

Suppose the current situation is such that the price level is 120, real GDP is $14 trillion, and long-run aggregate supply is $13.6 trillion. We can conclude that

• A) the price level will fall until long-run aggregate supply shifts to $14 trillion.
• B) the price level will fall and input prices will rise until real GDP pulls long-run aggregate supply up to $14 trillion.
• C) input prices will rise until real GDP is $13.6 trillion.
• D) aggregate demand will increase until both short-run and long-run aggregate supply equal $14 trillion.

---

Definitions:

Accounts Receivables

Outstanding payments owed by clients to a company for goods or services that have been delivered, but payment has not been received.

Commitment Fee

A charge levied by a lender on a borrower for an agreed loan commitment that has not yet been utilized.

Revolving Credit

A credit facility that allows a borrower to withdraw, repay, and redraw loans repeatedly up to a certain credit limit.

Take-Down

Take-down refers to the process of allocating and distributing securities to interested buyers in an underwriting arrangement.