Suppose the Economy Is in Long-Run Equilibrium

question 21

Multiple Choice

Suppose the economy is in long-run equilibrium.If there is an increase in government purchases at the same time there is a large increase in the price of oil,then 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:

Use Fee

A charge for using a service, facility, or equipment, typically levied to cover maintenance and operational costs.

Congestion

A condition of overcrowding or overburdening, often referring to heavy traffic or network data leading to delays.

Motorist

An individual who operates a motor vehicle, often referring to personal vehicle drivers in the context of road usage and traffic studies.

Mumbai Dabbawalas

Mumbai Dabbawalas refers to the network of individuals in Mumbai, India, who deliver home-cooked food to office workers, renowned for their efficiency and reliability.