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Consider the AD/AS Model and Suppose the Economy Begins at Potential

Question 95

Multiple Choice

Consider the AD/AS model and suppose the economy begins at potential output.The effect of a negative AS shock on real GDP will be reversed in the long run with a ________ shift in ________.


A) rightward; AS
B) rightward; AD
C) leftward; AS
D) leftward; AD
E) leftward; Y*

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