In the long run, following a combination of a negative demand shock and a temporary negative supply shock, ________
A) both inflation and output return to the original long-run equilibrium values
B) inflation is permanently increased, while output returns to potential output
C) output returns to potential output, while inflation may be higher or lower than its initial value
D) inflation is permanently reduced, while output returns to potential output
E) none of the above
D
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In the above figure suppose a minimum wage of $8 per hour is imposed. As a result, the quantity of labor supplied is ________ hours and the quantity of labor demanded is ________ hours
A) 3,000; 4,000 B) 4,000; 4,000 C) 2,000; 4,000 D) 4,000; 2,000
Which of the following are included in the U.S. current account balance?
I. exports to Japan II. interest payments made to Canada III. transfer payments made to Israel A) I only B) I and II C) I and III D) I, II and III