Consider an Economy with a Relatively Steep AS Curve

question 79

Multiple Choice

Consider an economy with a relatively steep AS curve.If the AD curve shifts to the left,then the price level will ________ and national output will ________.

• A)increase slightly; significantly increase
• B)increase slightly; significantly decrease
• C)increase sharply; increase slightly
• D)fall sharply; will not change.
• E)fall sharply; decrease slightly.

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Definitions:

Volume

The amount of space that an object or substance occupies.

Volume Increases

A phenomenon where the space that a substance occupies expands, often due to temperature rise or chemical reaction.

Temperature

A measure of the thermal energy of a substance or system, indicating how hot or cold it is.

Temperature Doubles

Refers to the scenario where the temperature of a system or substance is increased to twice its initial value.