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:

F Distribution

A probability distribution used in analysis of variance (ANOVA), among other tests; it is used to compare variances across multiple groups.

Probability

A numerical measure of the likelihood that an event will occur.

Value(s)

Represents the magnitude, amount, or number in a given context, or the worth of something.

Test Statistic

A calculated value from sample data that is used in a hypothesis test to determine whether to reject the null hypothesis.