Suppose the Economy Is in Long-Run Equilibrium

question 1

Multiple Choice

Suppose the economy is in long-run equilibrium.In a short span of time,there is a sharp increase in the supply of labor,a major new discovery of oil,and new environmental regulations that raise the cost of electricity production.In the short run

• A)the price level will rise and real GDP will fall.
• B)the price level will fall and real GDP will rise.
• C)the price level and real GDP will both stay the same.
• D)All of the above are possible.