Where SRAS and AD currently intersect at a real output level greater than the natural level of
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Where SRAS and AD currently intersect at a real output level greater than the natural level of real output,
a. it is a short-run equilibrium, and real output will tend to fall from its current level as it adjusts to long-run equilibrium.
b. it is a short-run equilibrium, and real output will tend to rise from its current level as it adjusts to long-run equilibrium.
c. it is a short-run disequilibrium, and real output will tend to fall from its current level as it adjusts to long-run equilibrium.
d. it is a short-run disequilibrium, and real output will tend to rise from its current level as it adjusts to long-run equilibrium.
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