Starting from Short-Run Equilibrium,the Following Occurs: Individuals Expect Higher (Future)incomes

question 33

Multiple Choice

Starting from short-run equilibrium,the following occurs: individuals expect higher (future) incomes and wage rates rise.What is the effect on the price level and Real GDP in the short run?

• A) The price level rises and Real GDP rises.
• B) The price level falls and Real GDP falls.
• C) The price level rises,but the effect on Real GDP cannot be determined.
• D) Real GDP rises,but the effect on the price level cannot be determined.
• E) Real GDP falls,but the effect on the price level cannot be determined.

---

Definitions:

Federal Regulation

Laws and guidelines established by the federal government to control or govern behavior and practices.

City Council Ordinance

A law or regulation enacted by the governing body of a city or municipality.

Aircraft

Vehicles capable of flight, including airplanes, helicopters, and other machines that can operate in the air.

Specific Statute

A law or legal standard that applies to a particular issue, activity, or entity, often detailed in scope and application.