Figure 14.3 -Refer to Figure 14.3.Suppose the Economy Is Initially at Long-Run

Multiple Choice

Figure 14.3

-Refer to Figure 14.3.Suppose the economy is initially at long-run equilibrium and the economy experiences a demand shock such as a stock market crash.Other things equal,following the effect of the stock market crash,the economy will ultimately end up at a new long-run equilibrium ________ the initial long-run equilibrium.

A) that is the same as
B) with a higher real GDP and a higher inflation rate than
C) with a higher real GDP than, and the same inflation rate as
D) with a higher inflation rate than, and the same real GDP as