Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.

What is the real GDP in year 1 using base year 1?

A) $418. B) $300. C) $360. D) $338.

As imports rose in 13 major industries studied by Shepherd, these U.S. producers, finding themselves at a cost and quality disadvantage relative to imported goods, initially responded by

a. improving technology b. exiting the industry c. seeking trade barriers d. asking that quotas and tariffs be removed e. raising prices to recoup their losses