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Consider the Basic AD/AS Macro Model in Long- Run Equilibrium

Question 28

Multiple Choice

Consider the basic AD/AS macro model in long- run equilibrium. A negative AS shock will the price level and output in the short run. In the long run, the price level will
And output .


A) increase; increase; increase further; will be restored to potential output
B) decrease; decrease; decrease further; will decrease further
C) increase; decrease; decrease; will be restored to potential output
D) increase; decrease; increase further; will be restored to potential output
E) decrease; decrease; decrease further; will be restored to potential output

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