Suppose that the economy is in long-run equilibrium. If there is a sharp increase in the minimum wage as well as increase in pessimism about future business conditions, then we would expect that in the short run,
a. real GDP will rise and the price level will rise, fall, or stay the Same.
b, real GDP will fall and the price level might rise, fall, or stay the same.
c. The price level will rise, and real GDP might rise, fall, or stay the same.
d, the price level will fall, and real GDP might rise, fall, or stay the same,
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