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Author Question: Suppose an economy is initially in long-run equilibrium and it then experiences a supply shock in ... (Read 54 times)

fbq8i

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on: Jun 30, 2018
Suppose an economy is initially in long-run equilibrium and it then experiences a supply shock in the form of exceptionally high energy prices. Which of these will be true in this economy?
 a. The short-run aggregate supply curve will shift leftward, and the long-run supply curve will shift rightward.
  b. The short-run aggregate supply curve and the long-run supply curve will shift rightward.
 c. The short-run aggregate supply curve will not shift, and the long-run aggregate supply curve will shift rightward.
  d. The short-run aggregate supply curve will shift rightward, but the long-run aggregate supply curve will not shift.
  e. The short-run aggregate supply curve and the long-run supply curve will shift leftward.

Question 2

In the long run, an expansionary monetary policy will lead to:
 a. a decrease in aggregate expenditure.
  b. an increase in unemployment.
 c. an increase in the price level.
 d. an increase in potential output.
 e. a decrease in the price level.


b614102004

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Reply #1 on: Jun 30, 2018
Answer to Question 1

e

Answer to Question 2

c


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