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:

Injunctive Norms

Socially accepted rules or standards that dictate the behaviors that are approved or disapproved of within a society or group.

Evaluative Component

Part of an attitude that involves making a judgment about the goodness or badness of an object, person, or event.

Busy New York City Subway

Busy New York City Subway describes the condition of New York City's subway system, often characterized by high passenger traffic and congestion.

Descriptive Norm

Social norms that describe what most people do in a specific context, rather than what they should do.