Multiple Choice
Suppose the economy is at full employment and a booming stock market encourages consumption spending to rise dramatically. What would be the MOST likely long-run impact?
A) The price level would fall, and real GDP would rise.
B) Real GDP first rises and then falls back to long-run equilibrium.
C) The price level would not change, but a recession would occur.
D) The price level will fall, and real GDP would fall.
Correct Answer:
Verified
Correct Answer:
Verified
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