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Unit 3 Progress Check: MCQ
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Country X is currently in long-run macroeconomic equilibrium. If the country's economy experiences a significant increase in the price of energy, a major input in production, which of the following will occur in the short run?
A The aggregate demand curve will shift to the left, and the actual rate of unemployment will exceed the natural rate of unemployment.
(B) The aggregate demand curve will shift to the left, and there will be an inflationary gap.
(C) The short-run aggregate supply curve will shift to the left, and the actual rate of unemployment will exceed the natural rate of unemployment.
(D) The short-run aggregate supply curve will shift to the left, and the price level will fall.
(E) The short-run aggregate supply curve will shift to the left and cause an inflationary gap.
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