Suppose the Economy Is in Long-Run Equilibrium

question 88

Multiple Choice

Suppose the economy is in long-run equilibrium.In a short span of time,there is a sharp rise in the stock market,an increase in government purchases,an increase in the money supply and a decline in the value of the dollar.In the short run

• A)the price level and real GDP will both rise.
• B)the price level and real GDP will both fall.
• C)neither the price leave nor real GDP will change.
• D)All of the above are possible.

---

Definitions:

Narrative Psychology

A field of psychology focused on how human beings interpret experience by constructing stories and narratives, emphasizing the storied nature of human thought.

Generativity Scripts

Generativity scripts are cognitive structures and societal norms guiding the motivation and actions towards nurturing and contributing to the well-being of future generations.

Socioemotional Selectivity Theory

A concept proposing that with aging, individuals focus more on emotionally significant goals and relationships rather than seeking new knowledge or forming new acquaintances.

Social Convoy Theory

A theoretical model suggesting that individuals move through life surrounded by circles of close relationships that provide social support.