Refer to Figure 33-2. If the economy is in long-run equilibrium, a favorable shift in short-run aggregate supply curve would move the economy from

A) S to T.
B) T to U.
C) U to V.
D) V to S.

Question

Refer to Figure 33-2. If the economy is in long-run equilibrium, a favorable shift in short-run aggregate supply curve would move the economy fromA) S to T.B) T to U.C) U to V.D) V to S.

brigitte nguyen · Accepted Answer

Final Answer : A, Explanation :  In long-run equilibrium, the economy is at full employment. A favorable shift in the short-run aggregate supply curve, such as a decrease in input prices or an increase in productivity, would lead to a movement from a point like S to T, where output increases and prices decrease.

Refer to Figure 33-2. If the economy is in long-run equilibrium, a favorable shift in short-run aggregate supply curve would move the economy from

A) S to T.
B) T to U.
C) U to V.
D) V to S.

Definitions

Learning Objectives

Learning Objectives

Related questions