Ceteris paribus, in the long run, a negative supply shock causes
A)the long-run aggregate supply curve to shift to the left.
B)the price level to rise initially, and then return to its lower level.
C)unemployment to fall below its short-run level.
D)equilibrium real GDP to fall.
E)higher labour force participation.

Question

Quizplus · Accepted Answer

The Answer of Ceteris paribus, in the long run, a negative supply shock causes
A)the long-run aggregate supply curve to shift to the left.
B)the price level to rise initially, and then return to its lower level.
C)unemployment to fall below its short-run level.
D)equilibrium real GDP to fall.
E)higher labour force participation.

Ceteris Paribus, in the Long Run, a Negative Supply Shock