In the figure above, the economy is at an equilibrium with real ...

[misspop]

In the figure above, the economy is at an equilibrium with real GDP of 16 trillion and a price level of 110. As the economy moves toward its ultimate equilibrium, the ________ curve shifts ________ because ________.
 
  A) aggregate supply; leftward; the money wage rate rises
  B) aggregate supply; rightward; the money wage rate falls
  C) aggregate demand; rightward; the money wage rate falls
  D) aggregate demand; leftward; the money wage rate rises
  E) potential GDP; leftward; the money wage rate falls

Question 2

Fill in the blank: Since millions of people now use email as opposed to traditional snail mail, the price elasticity of demand for the Post Office's first class letter service tends to ________.
 
  A) decrease
  B) increase
  C) increase in the short run but then decrease in the long run
  D) leave unchanged

[shayla]

Answer to Question 1

B

Answer to Question 2

B