If a demand shock causes the economy to move to a real GDP level that is below its full employment level, then
a. we refer to this as a positive demand shock.
b. the economy will remain at this point in the long run.
c. the AS curve will adjust in the long run until the economy returns to full employment.
d. the AD curve will move back to its original position in the long run.
e. the unemployment rate will decline.
C
Economics
You might also like to view...
Which of the following is a way banks reduce risk?
a) Screening firms. b) Evaluating firms. c) Monitoring firms. d) Pooling money into portfolios.
Economics
What is the ability-to-pay principle of taxation? List one strength and one weakness of the ability-to-pay principle as a guide to tax policy
What will be an ideal response?
Economics