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:

Bonds Formed

The creation of chemical bonds between two or more atoms leading to the formation of molecules or compounds.

Bond Dissociation Energies

The energy required to break a specific chemical bond in a molecule, indicating the bond's strength.

Carbon-bromine Bond

The covalent bond formed between a carbon atom and a bromine atom, often seen in organobromine compounds.

Methyl Carbon

A carbon atom bonded to a methyl group, -CH3, often involved in organic reactions.