Suppose Firms Are Currently Producing Output at a Level Beyond

question 69

Multiple Choice

Suppose firms are currently producing output at a level beyond their normal capacity.In this situation,the AS curve will be relatively ________ and a positive AD shock will result in ________.

• A)steep; an increase in the price level with a small increase in real GDP
• B)flat; an equal increase in the price level and in real GDP
• C)flat; a very small increase in prices but a large increase in real GDP
• D)flat; a very small decrease in the price level and a decrease in real GDP
• E)steep; a decrease in the price level and a very small decrease in real GDP

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Definitions:

Nutrient Molecules

The basic components of food that are necessary for growth, metabolism, and the body's functions, such as proteins, vitamins, and minerals.

Blood Clot

A semi-solid mass of blood that forms when blood components, such as platelets and fibrin, aggregate to stop bleeding from injured vessels, a key component of the hemostatic process.

Vitamin

Organic compounds that are essential in small amounts for the body to function properly, often obtained through diet.

Gastrin

A hormone produced by the stomach that stimulates the secretion of gastric acid.