If the economy is in short-run equilibrium but not in long-run equilibrium, what forces cause the economy to return to long-run equilibrium?
A)Input prices change, causing the short-run aggregate supply curve to shift.
B)The long-run aggregate supply curve shifts until long-run equilibrium is restored.
C)The aggregate demand curve shifts, causing price changes that restore long-run equilibrium.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

Input prices adjust in response to economic conditions, causing the short-run aggregate supply (SRAS) curve to shift. This adjustment process helps the economy return to long-run equilibrium by aligning production with the natural level of output, where the economy is at full employment.

If the Economy Is in Short-Run Equilibrium but Not in Long-Run