With a Steep Short-Run Aggregate Supply Curve

question 270

Multiple Choice

With a steep short-run aggregate supply curve,

• A) an increase in taxes that does not change potential GDP will not decrease real GDP by much.
• B) fiscal policy will be an effective tool to reduce unemployment without raising prices too much.
• C) there is a large change in real GDP whenever the price level rises.
• D) an increase in government expenditure will not have an impact on the price level.

---

Definitions:

Holder in Due Course

A party who has acquired a negotiable instrument in good faith and for value, thereby obtaining rights to it free from certain defenses.

Golden Retriever Puppy

A young dog of the Golden Retriever breed, known for its friendly, tolerant attitude and golden-colored coat.

Paper Route

historically refers to a job involving the delivery of newspapers to a specific route of homes or businesses, often carried out by children or young adults.

$300 Check

A written, dated, and signed instrument that directs a bank to pay a specific sum of money, in this case, $300, to the bearer or to a specific individual or party.