Consider the AD/AS Model Below with a Constant Rate of Inflation.No

question 96

Multiple Choice

Consider the AD/AS model below with a constant rate of inflation.No exogenous AD or AS shocks are occurring. FIGURE 29-1 Refer to Figure 29-1.Suppose the constant rate of inflation is 3%.In this case,

• A)equilibrium GDP and the price level are each increasing at a constant rate of 3% per year.
• B)the AS curve is shifting upward by 3% per year and the AD curve remains stationary.
• C)the AD curve is shifting upward by 3% per year and the AS curve remains stationary.
• D)an annual shift upward of each of the AS and AD curves by 1.5% leads to a constant rate of inflation of 3%.
• E)an annual shift upward of the AS curve by 3% is matched by an annual shift upward of the AD curve by 3%.

---

Definitions:

Seeks Equity

A legal principle where a party requests a fair and impartial remedy in a dispute, typically when monetary damages are insufficient.

Clean Hands

A doctrine that prevents individuals from seeking legal remedies if they have engaged in unethical behavior in relation to the subject of their lawsuit.

Specific Performance

A legal remedy requiring a party to fulfill their obligations under a contract, rather than paying damages for breach.

Rare Books

Books that are valuable due to their age, scarcity, historical significance, or unique features.