Consider the AD/AS macro model. A permanent demand shock that causes equilibrium output to rise above potential output will OA. set off an endless cycle of price rises and increases in unemployment. B. always reverse itself. OC. allow a stable expansion of real income over time. OD. result in a price level lower than that preceding the demand shock. OE. be negated in the long run, through the economy's adjustment process.
Consider the AD/AS macro model. A permanent demand shock that causes equilibrium output to rise above potential output will OA. set off an endless cycle of price rises and increases in unemployment. B. always reverse itself. OC. allow a stable expansion of real income over time. OD. result in a price level lower than that preceding the demand shock. OE. be negated in the long run, through the economy's adjustment process.
Chapter22: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 1P
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