Suppose the economy is in long-run equilibrium.In a short span of time,there is a sharp rise in the stock market,an increase in government purchases,an increase in the money supply and a decline in the value of the dollar.In the short run
A)the price level and real GDP will both rise.
B)the price level and real GDP will both fall.
C)neither the price leave nor real GDP will change.
D)All of the above are possible.

Question

Quizplus · Accepted Answer

In the short run, a rise in the stock market, increased government purchases, increased money supply, and a decline in the dollar's value all boost aggregate demand, leading to higher price levels and real GDP.

Suppose the Economy Is in Long-Run Equilibrium