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An economy is in long-run macroeconomic equilibrium when it experiences a positive demand shock. Which of the following things will be the result of the shock in the short run?

A

A recessionary gap with a decrease in price levels.

B

An inflationary gap with an decrease in price levels.

C

A recessionary gap with a increase in price levels.

D

An inflationary gap with an increase in price levels.

E

There will be no change to the macroeconomic equilibrium in the short run.

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