Which of the following statements describes how the economy returns to long-run equilibrium following the inflationary gap?
a. Rising input prices facilitate a shift from SRAS1 to SRAS2.
b. Actual real output increases from RGDPNR to RGDP2.
c. A temporary positive shock shifts LRAS rightward.
d. Rising demand facilitates a shift from AD1 to AD2.
a. Rising input prices facilitate a shift from SRAS1 to SRAS2.
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Refer to Figure 15.2. The economy is at full employment and the unemployment rate is at the natural rate at point
A) a. B) b. C) c D) d.
Suppose that last year the Consumer Price Index was 124; this year it is 130.7. What was the inflation rate between these years?
A) 30.7 percent B) 6.7 percent C) 5.4 percent D) 5.1 percent
Most pharmaceutical firms selling prescription drugs continue to earn economic profits long after the patents on the prescription drugs expire because they have established a strong foothold in the market
Indicate whether the statement is true or false
In the real business cycle model, unemployment is ________
A) costless to individual workers B) the result of higher productivity C) voluntary D) the result of higher wages