An Initial Increase in Aggregate Demand That Is NOT Followed

question 252

Multiple Choice

An initial increase in aggregate demand that is NOT followed by an increase in the quantity of money results in a long-run equilibrium with

• A) a higher price level and an increased level of real GDP.
• B) the same price level and a lower level of real GDP.
• C) a higher price level but the same real GDP.
• D) None of the above answers are correct.

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Definitions:

Neuroeconomics

Interdisciplinary field that seeks to understand how the brain makes decisions.

Reflexive Decision System

A cognitive system that makes decisions automatically based on habit or instinct rather than conscious analysis.

Nucleus Accumbens

A region in the brain's basal forebrain rostral to the preoptic area of the hypothalamus, playing a central role in the reward circuit, motivation, pleasure, and reinforcement learning.

Apraxia

Inability to make voluntary movements in the absence of paralysis or other motor or sensory impairment, especially an inability to make proper use of an object.