If the SRAS Curve Intersects the AD Curve to the Right

question 43

Multiple Choice

If the SRAS curve intersects the AD curve to the right of Natural Real GDP,the economy is

• A) in a recessionary gap.
• B) at Natural Real GDP.
• C) in an inflationary gap.
• D) at full-employment Real GDP.

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Definitions:

Confounding Variable

An extraneous variable in an experimental design that correlates with both the dependent and independent variables, potentially leading to a false assumption of causality.

Experimental Approach

A research method involving the manipulation of variables to observe and measure the effects on subjects in a controlled setting.

Manipulation of Variable

The process in experimental research of changing one variable to determine if changes in one variable cause changes in another variable.

Confounds

Variables that obscure the clear understanding of the relationship between different variables in a study, due to their intertwined effects.