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Put in chronological order the events that take an economy from its original long-run equilibrium to a new long-run equilibrium.

a. Stock prices rise in the United States, increasing citizens’ real wealth.
b. Aggregate demand shifts to the right, increasing the price level in the short run.
c. Gradually, all prices in the economy adjust to the demand shift.
d. Short-run aggregate supply shifts to the left, returning to long-run equilibrium and a higher price level.

Sagot :

Answer:

b. Aggregate demand shifts to the right, increasing the price level in the short run.

a. Stock prices rise in the United States, increasing citizens’ real wealth.

d. Short-run aggregate supply shifts to the left, returning to long-run equilibrium and a higher price level.

c. Gradually, all prices in the economy adjust to the demand shift.

Explanation:

The above arranged statement are the chronological order of the events which takes an economy from its original long-run equilibrium to a new long-run equilibrium.

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