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When the Economy Experiences a Permanent Supply Side Shock That

Question 127

Multiple Choice

When the economy experiences a permanent supply side shock that shifts the long-run aggregate supply to the right,the short run aggregate supply curve:


A) will instantly shift right with the long-run aggregate supply to the new long-run equilibrium.
B) will begin by shifting left initially,and then be pulled right by the long-run aggregate supply over time.
C) will gradually shift right until it reaches long-run aggregate supply and the new long-run equilibrium.
D) None of these is true.

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