Following Any AD or AS Shock, Economists Typically Assume That

Multiple Choice

Following any AD or AS shock, economists typically assume that the adjustment process continues until

A) the output gap is at a stable level.
B) factor prices have returned to their levels previous to the shock.
C) Y* adjusts to its long- run equilibrium level.
D) the AD and AS curves intersect each other at the correct price level.
E) real GDP returns to Y*.