Imagine that in 2019 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some ti

Question

mash [69]

2 years ago

5

Imagine that in 2019 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some ti

me. Refer to Scenario 33-2. In the short run what happens to the price level and real GDP

Business

1 answer:

V125BC [204] · Answer 1 · 2022-11-20T16:05:41+03:00

In the short-run, the effect on the price level and the real GDP is a. Both the price level and real GDP rise.

Since the economy is in long-run equilibrium in 2019, and the stock prices unexpectedly rise and stay high for a long time, it means that the price level does not:

Rise while the real GDP falls
Fall while the real GDP rises
Fall with the real GDP.

Question Options:

a. both the price level and real GDP rise.

b. the price level rises and real GDP falls.

c. the price level falls and real GDP rises.

d. both the price level and real GDP fall.

Thus, in the short-term of this economy both the price level and real GDP rise.

Learn more: brainly.com/question/13029724