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Suppose an Economy Is Initially in Long-Run Equilibrium and It

Question 29

Multiple Choice

Suppose an economy is initially in long-run equilibrium and it then experiences a supply shock in the form of exceptionally high energy prices.Which of these will be true in this economy?


A) The short-run aggregate supply curve will shift leftward,and the long-run supply curve will shift rightward.
B) The short-run aggregate supply curve and the long-run supply curve will shift rightward.
C) The short-run aggregate supply curve will not shift,and the long-run aggregate supply curve will shift rightward.
D) The short-run aggregate supply curve will shift rightward,but the long-run aggregate supply curve will not shift.
E) The short-run aggregate supply curve and the long-run supply curve will shift leftward.

Correct Answer:

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