Suppose the economy is in long-run equilibrium. Premier Aviary succeeds in getting a major new highway project for his province. At the same time, Premier Green succeeds in getting major new restrictions on logging enacted for her province. In the short run, what would we expect to happen?

Select one:

a.Real GDP will fall, and the price level might rise, fall, or stay the same.

b.Real GDP will rise, and the price level might rise, fall, or stay the same.

c.The price level will fall, and real GDP might rise, fall, or stay the same.

d.The price level will rise, and real GDP might rise, fall, or stay the same.

2.How are the effects of an increase in the price level that is less than expected shown in theaggregate demand and aggregate supply model?

Select one:

a.by shifting the short-run aggregate-supply curve left

b.by shifting the short-run aggregate-supply curve right

c.by moving to the right along a given aggregate-supply curve

d.by moving to the left along a given aggregate-supply curve