Using the Aggregate Demand-Aggregate Supply Model, Predict What Happens in the Short

question 37

Multiple Choice

Using the aggregate demand-aggregate supply model, predict what happens in the short run if an increase in health insurance premiums paid by firms raises the cost of employing each worker.

• A) The aggregate supply curve shifts right; the aggregate demand curve is not affected; price level decreases; real GDP increases.
• B) The aggregate demand curve shifts right; the aggregate supply curve is not affected; price level and real GDP increase.
• C) The aggregate demand curve shifts left; the aggregate supply curve is not affected; price level and real GDP decrease.
• D) The aggregate supply curve shifts left; the aggregate demand curve is not affected; price level increases; real GDP decreases.

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Definitions:

Accessory Pigments

Pigments in plants and algae that capture light energy and pass it to chlorophyll during photosynthesis, extending the range of light wavelengths that can be used.

Photosynthetic Organisms

Organisms that convert light energy into chemical energy through the process of photosynthesis, including plants, algae, and certain types of bacteria.

Photons

Elementary particles of light and other forms of electromagnetic radiation, with wave-particle duality.

Thylakoid Membrane

Inner membrane system that carries out light-dependent reactions in chloroplasts and cyanobacteria.