Consider the AD/AS Model

question 98

Multiple Choice

Consider the AD/AS model.Since output in the long run is determined by Y^*,the only role of the AD curve is to determine the price level.This is true because

• A)Y^* is independent of the price level.
• B)the aggregate demand curve is vertical.
• C)the aggregate demand curve is horizontal.
• D)Y^* depends on the price level.
• E)the AS curve is upward sloping.

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Definitions:

Distinctiveness

The quality of being easily distinguished or set apart from others due to unique attributes or characteristics.

Consistency

The quality of being uniform, stable, and free from contradiction over time.

Consensus

A form of collective agreement where all members of a group support a decision even if it may not be their first choice, ensuring that everyone's opinion is considered.

Self-Serving Bias

is the common human tendency to attribute positive outcomes to one's own character or behaviors but blame outside factors for negative outcomes.