-An Economy Is at Potential GDP and the Price Level

question 264

Multiple Choice

-An economy is at potential GDP and the price level is 100 in the figure above. If aggregate demand unexpectedly increases so that the aggregate demand curve shifts to AD₁, the inflation rate is___________

• A) 0 percent a year
• B) More than 20 percent a year
• C) 10 percent a year
• D) 20 percent a year

---

Definitions:

Round Lots

Standardized number of units of a financial instrument, usually 100 shares for stocks.

Per Share

A financial metric that represents some quantity divided by the total number of outstanding shares of a company, often used in financial ratios.

First-day Returns

The percentage change in price of a stock or other security from its offering price on its first day of public trading.

SIPC

SIPC stands for the Securities Investor Protection Corporation, which is a nonprofit organization that insures investors' securities and cash in the event a brokerage firm goes bankrupt or faces financial difficulties.