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.

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Definitions:

Equivalent Unit

A concept in cost accounting used to express the amount of work in progress inventory in terms of fully completed units of output.

Goods

Tangible personal property or merchandise.

UCC

The Uniform Commercial Code is a comprehensive set of laws governing all commercial transactions in the United States.

Risk Of Loss

The legal responsibility for the accidental destruction or deterioration of goods, often determining which party bears the risk during transactions.