If an Increase in Aggregate Demand Causes Prices to Increase

question 23

Multiple Choice

If an increase in aggregate demand causes prices to increase slightly but output to increase significantly, then

• A)the AS-curve must be very flat
• B)the AD-curve must be very steep
• C)the AD- and AS-curves must both be very steep
• D)we must be looking at the very long-run AD-AS model
• E)we must be looking at the very short-run AD-AS model

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Definitions:

Marble-Sized

Describes an object or mass that is about the same size as a marble, indicating a small, round shape approximately 1/2 inch to 1 inch in diameter.

Coxal Bone

Another term for the hip bone, comprising the ilium, ischium, and pubis, that forms part of the pelvis.

Pelvic Girdle

The ring of bones in the lower torso, comprised of the two hip bones, sacrum, and coccyx, providing support for the human body's weight.

Axial Skeleton

The axial skeleton is the part of the skeleton that consists of the bones of the head and trunk of a vertebrate, including the skull, spine, sternum, and ribs.