An Important Assumption in the AD/AS Macro Model Is That

question 55

Multiple Choice

An important assumption in the AD/AS macro model is that when real GDP exceeds potential output,factor prices rise and the

• A)AS curve shifts to the left.
• B)AD curve shifts to the right.
• C)AS curve shifts to the right very rapidly.
• D)AD curve shifts to the left rapidly.
• E)None of the above - the AS curve remains unchanged.

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at different prices.

British Pounds

The currency of the United Kingdom, symbolized as GBP, and commonly referred to as the pound sterling.

Supply

The total amount of a good or service that is available for purchase at various prices in a given market.

Japanese Yen

The official currency of Japan, used as a medium of exchange and a standard of value within the country.