In the Basic AD/AS Model,the Effect of an Aggregate Demand

question 10

Multiple Choice

In the basic AD/AS model,the effect of an aggregate demand shock is divided between a change in output and a change in the price level.How the effect is divided depends on the

• A)amount of inflation in the economy.
• B)position of the AE curve.
• C)size of the simple multiplier.
• D)slope of the AD curve.
• E)slope of the AS curve.

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Definitions:

Aristotle

An ancient Greek philosopher and polymath, a student of Plato and teacher of Alexander the Great, whose writings covered many subjects, including physics, biology, zoology, metaphysics, logic, ethics, aesthetics, poetry, theater, music, rhetoric, linguistics, politics, and government.

Hedonism

An ethical theory that argues pleasure or happiness is the highest good and proper aim of human life.

Aristotle's Virtues

The principle of moral virtues proposed by Aristotle, suggesting a balanced and moderate behavior as the path to a virtuous and fulfilling life.

Community

A group of people living in the same place or having a particular characteristic in common, often marked by a sense of fellowship.