Refer to the given figure.
In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as:
A. aggregate demand shifting rightward.
B. short-run aggregate supply shifting downward.
C. aggregate demand shifting leftward.
D. long-run aggregate supply shifting leftward.
Answer: B
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What will be an ideal response?
A profit-seeking firm will choose the combination of inputs that:
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