CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

If the intersection of aggregate demand and short-run aggregate supply is to the right of long-run aggregate supply, in the long run there will be a decrease in ______.
A. output prices
B. resource prices
C. output
Explanation: The economy is experiencing a temporary economic boom but this cannot last, since the intersection is to the right of long-run aggregate supply. Output and resource prices will rise, but with sufficient time for the adjustment of all prices output will fall back to the level of long-run aggregate supply (due to higher resource prices).

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