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Suppose the Economy Is Initially in Long-Run Equilibrium and Then

Question 29

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Suppose the economy is initially in long-run equilibrium and then it experiences a supply shock in the form of sharply higher energy prices.How will the short-run and long-run aggregate supply curves be affected?  


A)  The short-run aggregate supply curve shifts leftward, but the long-run aggregate supply curve does NOT shift. 
B)  The short-run aggregate supply curve shifts rightward, and the long-run aggregate supply curve shifts rightward. 
C)  The short-run aggregate supply curve does NOT shift, and the long-run aggregate supply curve shifts rightward. 
D)  The short-run aggregate supply curve shifts rightward, but the long-run aggregate supply curve does NOT shift.

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