Optimism

Imagine that the economy is in long$-$run equilibrium. Then, perhaps because of improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way for some time.

Refer to Optimism. In the long run, the change in price expectations created by optimism shifts

Select one:

a$.$ long$-$run aggregate supply right.

b$.$ long$-$run aggregate supply left.

C$.$ short$-$run aggregate supply right.

d$.$ short$-$run aggregate supply left.