Suppose an Economy Has an Upward-Sloping AS Curve and an Inflationary

question 60

Multiple Choice

Suppose an economy has an upward-sloping AS curve and an inflationary gap equal to $10 billion.If AD shifts to the left by $10 billion,

• A)Real output will fall by less than $10 billion.
• B)Real output will fall by $10 billion.
• C)The inflationary gap will be eliminated.
• D)A recessionary gap will be created.

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Definitions:

Sleep

A naturally recurring state of mind and body characterized by altered consciousness, relatively inhibited sensory activity, and inhibition of nearly all voluntary muscles.

Seizure

A sudden, uncontrolled electrical disturbance in the brain that can cause changes in behavior, movements, feelings, and levels of consciousness.

Studying

The act of engaging in intellectual activity to acquire knowledge or understand a subject matter deeply.

Anxiety

A mental health disorder characterized by feelings of worry, anxiety, or fear that are strong enough to interfere with one's daily activities.