The economy is in long-run equilibrium. Suddenly, due to corporate scandals, international tensions, and the loss of confidence among policymakers, citizens become pessimistic conceming the future. They maintain this level of pessimism for a long time. Refer to the Scenario 14-2. Which of the following are consistent with the aggregate demand and aggregate supply theory? Select one a. The expected price level falls. Bargains are struck for lower increases in wages. b. The expected price level falls. Bargains are struck for higher increases in wages. c. The expected price level rises. Bargains are struck for lower increases in wages. d. The expected price level rises. Bargains are struck for higher increases in wages.

The economy is in long-run equilibrium. Suddenly, due to corporate scandals, international tensions, and the loss of confidence among policymakers, citizens become pessimistic conceming the future. They maintain this level of pessimism for a long time. Refer to the Scenario 14-2. Which of the following are consistent with the aggregate demand and aggregate supply theory? Select one a. The expected price level falls. Bargains are struck for lower increases in wages. b. The expected price level falls. Bargains are struck for higher increases in wages. c. The expected price level rises. Bargains are struck for lower increases in wages. d. The expected price level rises. Bargains are struck for higher increases in wages.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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