Assume the economy is in long-run equilibrium with real GDP = potential GDP = $11 trillion and Price level = 1.5. AD increases. If no intervention takes place, which represents a proper state of the economy when the economy returns to long-run equilibrium? O A) real GDP = $12 trillion and price level = 1.7 O B) real GDP = $11 trillion and price level = 1.8 O C) real GDP = $11 trillion and price level = 1.4 %3D O DI real GDP = $11 trillion and price level 1 5
Assume the economy is in long-run equilibrium with real GDP = potential GDP = $11 trillion and Price level = 1.5. AD increases. If no intervention takes place, which represents a proper state of the economy when the economy returns to long-run equilibrium? O A) real GDP = $12 trillion and price level = 1.7 O B) real GDP = $11 trillion and price level = 1.8 O C) real GDP = $11 trillion and price level = 1.4 %3D O DI real GDP = $11 trillion and price level 1 5
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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i ll rate. don't do it wrong.
![Assume the economy is in long-run equilibrium with real GDP = potential GDP = $11
trillion and Price level = 1.5. AD increases. If no intervention takes place, which
represents a proper state of the economy when the economy returns to long-run
equilibrium?
A) real GDP = $12 trillion and price level = 1.7
O B) real GDP = $11 trillion and price level = 1.8
O C) real GDP = $11 trillion and price level = 1.4
D) real GDP = $11 trillion and price level = 1.5](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff5d9efd4-2d8d-4d29-9973-3d9836085f55%2F08b2565f-ab63-46a6-899d-697bd2ce6f15%2Fgxdw8ud_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume the economy is in long-run equilibrium with real GDP = potential GDP = $11
trillion and Price level = 1.5. AD increases. If no intervention takes place, which
represents a proper state of the economy when the economy returns to long-run
equilibrium?
A) real GDP = $12 trillion and price level = 1.7
O B) real GDP = $11 trillion and price level = 1.8
O C) real GDP = $11 trillion and price level = 1.4
D) real GDP = $11 trillion and price level = 1.5
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