Consider the Basic AD/AS Model

question 85

Multiple Choice

Consider the basic AD/AS model.A rise in an input price like the wage rate would be expected to create a new macroeconomic equilibrium,which in comparison to the original equilibrium,has a price level that is

• A)higher and a real GDP that is higher.
• B)higher and a real GDP that is lower.
• C)higher and a real GDP that is the same.
• D)lower and a real GDP that is higher.
• E)lower and a real GDP that is lower.

---

Definitions:

Environmental Degradation

The deterioration of the environment through the depletion of resources, destruction of ecosystems, and extinction of wildlife.

Law Of Conservation

A principle stating that energy cannot be created or destroyed in an isolated system, but can only be transformed from one form to another.

Chemical Change

A process where substances interact to form new substances with different chemical and physical properties.

Lower-Quality Energy

Energy forms that are less useful or harder to convert into work, often associated with higher entropy and less efficiency in usage.