Consider the AD/AS Model Below with a Constant Rate of Inflation.No

question 60

Multiple Choice

Consider the AD/AS model below with a constant rate of inflation.No exogenous AD or AS shocks are occurring. FIGURE 29-1
-Refer to Figure 29-1.A constant rate of inflation of 3% is portrayed in an AD/AS diagram like this one as

• A)an annual shift upward of the AD curve by 3%.
• B)an annual shift upward of the AS curve by 3%.
• C)an annual increase in the inflation rate of 3%.
• D)an annual increase in the equilibrium price level of 3%.
• E)Not applicable.The diagram shows the price level,not the inflation rate.

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Definitions:

Fertilization

The process in which a sperm cell unites with an egg cell, leading to the formation of a zygote and the initiation of pregnancy.

Sperm

Male reproductive cells designed to fertilize female eggs, contributing half of the genetic material necessary for offspring.

Ovum

The female reproductive cell or egg that, when fertilized by a sperm, can develop into a new organism.

Chromosomes

Rod-shaped structures in the nuclei of body cells, which contain all the genes and carry all the genetic information necessary to make a human being.