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-Refer to the Graph in the Exhibit

Question 21

Multiple Choice

-Refer to the graph in the exhibit.Suppose P₃ is the prevailing price level.How will prices be affected in the long run, assuming a hands-off policy by government?   A)  The price level will rise.  B)  The price level will fall.  C)  The price level will remain the same.  D)  The price level will first rise, and then fall.
-Refer to the graph in the exhibit.Suppose P₃ is the prevailing price level.How will prices be affected in the long run, assuming a hands-off policy by government?  


A)  The price level will rise. 
B)  The price level will fall. 
C)  The price level will remain the same. 
D)  The price level will first rise, and then fall.

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