If the Aggregate Demand Curve Shifts Rightward Following a Decrease

question 125

Multiple Choice

If the aggregate demand curve shifts rightward following a decrease in the federal funds rate, what can be concluded if the short- run aggregate supply curve is rather steep?

• A) There will be a significant increase in real GDP with little impact on the price level.
• B) There will be little increase in real GDP but a significant increase in the price level.
• C) There will be a significant increase in both real GDP and the price level.
• D) There is significant unemployment and slack in the economy.

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Definitions:

Multistage Design

A sampling method involving multiple stages of selection, typically used in large-scale surveys to efficiently gather data.

Statistically Significant

A result is said to be statistically significant if it is unlikely to have occurred by chance alone, according to a predetermined threshold of significance.

Response Variable

In statistics, the variable that measures the outcome of a study or experiment.

Helium

A chemical element with the symbol He and atomic number 2, known for being the second lightest and second most abundant element in the observable universe.