In an open economy, in the long run, permanent shocks to GDP:
A) are always contentious during an election year.
B) are rare, but cannot be ignored.
C) must be dealt with by permanent changes in consumption.
D) indicate that taxes need to be raised.

Question

Quizplus · Accepted Answer

Permanent shocks to GDP in an open economy necessitate adjustments in various economic variables, including consumption. In the long run, economies adjust to new levels of output, and this often involves changes in consumption patterns to align with the new economic reality.

In an Open Economy, in the Long Run, Permanent Shocks