An Aggregate Demand Shock Will Have a Large Effect on Real

question 135

Multiple Choice

An aggregate demand shock will have a large effect on real GDP and a small effect on the price level when

• A)the AS curve is steep.
• B)the AD curve intersects the AS curve on the downward-sloping portion of the AS curve.
• C)the AS curve is close to horizontal.
• D)the AS curve is vertical.
• E)the AD curve is steep.

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Definitions:

Election of Remedies

The election of remedies is a legal principle that requires a wronged party to choose a single legal remedy among several available, thereby preventing multiple recoveries for the same injury.

Specific Performance

A legal remedy requiring a party to execute a contract according to the precise terms agreed on, rather than paying damages.

Restitution

A legal principle that requires a party to restore the other party to their original position prior to a loss or injury, or to compensate for the loss.

Injunction

A legal order that requires an individual or entity to do or to cease doing a specific action.