MCQOPTIONS
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				| 1. | 
                                    Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run ? | 
                            
| A. | Output rises, prices are unchanged from the initial value | 
| B. | Output and the price level are unchanged from their initial values | 
| C. | Output falls, prices are unchanged from the initial value | 
| D. | Prices fall, output is unchanged from its initial value | 
| Answer» C. Output falls, prices are unchanged from the initial value | |