Over the Horizontal Range of the Economy's AS Curve (Assuming

question 1

Multiple Choice

Over the horizontal range of the economy's AS curve (assuming such a range exists) ,a rightward shift of the AD curve will result in

• A)an increase in prices and no change in real GDP.
• B)an increase in real GDP and no change in prices.
• C)an increase in both real GDP and prices.
• D)a decrease in both real GDP and prices.
• E)a decrease in real GDP but no change in prices.

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Definitions:

Principle of Closure

A concept in Gestalt psychology that describes the mind's tendency to see incomplete figures as complete.

Perceptual Organization

The tendency to integrate perceptual elements into meaningful patterns.

Brightness Constancy

The tendency to perceive an object as being just as bright even though lighting conditions change its intensity.

Luminous

Emitting or reflecting light, brightly shining, often used to describe objects that can glow in the dark.