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Suppose the economy is in long-run equilibrium. If there is a decrease in the supply of labor as well as a decrease in the money supply, then we would expect that in the short run,
the price level will rise, and real GDP might rise, fall, or stay the same.
real GDP will rise and the price level might rise, fall, or stay the same.
the price level will fall, and real GDP might rise, fall, or stay the same.
real GDP will fall and
the price level might rise, fall, or stay the same.
Suppose the economy is in long-run equilibrium. Senator A succeeds in getting taxes lowered. At the same time, Senator B succeeds in getting major restrictions on logging enacted. In the short run
real GDP will fall and the price level might rise, fall, or stay the same.
real GDP will rise and the price level might rise, fall, or stay the same.
the price level will fall, and real GDP might rise,
fall, or stay the same.
the price level will rise, and real GDP might rise, fall, or stay the same.
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