The IA Line Does Not Shift in the Short Run

question 68

Multiple Choice

The IA line does not shift in the short run because

• A)real and potential GDP are not equal.
• B)potential GDP does not change.
• C)of expectations and staggered wage and price adjustment.
• D)real GDP does not change.
• E)there is no spending balance.

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Definitions:

Reaching Consensus

The process of arriving at a mutual agreement or decision among group members through discussion and negotiation.

Conjunction Error

A logical fallacy that occurs when someone assumes that specific conditions are more probable than a single general one.

Accurate Decisions

Selections or choices based on correct or precise information, leading to accurate outcomes or resolutions.

Three-Person Groups

Are triads, which introduce complexity in relationships and dynamics compared to dyads, often leading to coalition formation and potential imbalance in influence.