Consider the AD/AS Macro Model

question 133

Multiple Choice

Consider the AD/AS macro model.The study of short-run cyclical fluctuations usually assumes,for simplicity,that there are no changes in

• A)the AS curve.
• B)potential GDP.
• C)either the AS curve or potential GDP.
• D)either the AD or AS curves.
• E)the intersection of the AD and AS curves.

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Definitions:

Rational Self-Interest

The principle that individuals tend to make decisions that maximize their own utility or benefit.

Collude

To conspire or work together secretly, especially in order to cheat or deceive others.

Dutch Auction

A type of auction where the auctioneer starts with a high asking price which is lowered until some participant is willing to accept the auctioneer’s price, or a predetermined minimum price is reached.

Sealed-Bid Auction

A type of auction where all bidders simultaneously submit sealed bids without knowing the bids of other participants.