If the Aggregate Demand Curve Shifts Rightward Following a Decrease

question 213

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

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Definitions:

Brazil

Brazil is the largest country in South America and the fifth largest in the world, known for its diverse culture and strong economy.

Net Investment Income

The difference between the revenue from investment assets and the expenses associated with managing and making those investments.

Foreign Assets

Properties, investments, or other financial assets located in countries outside of the investor's residence country.

Financial Account

The record of a country’s international transactions involving purchases or sales of financial and real assets.