Consider the AD/AS Macro Model

question 37

Multiple Choice

Consider the AD/AS macro model.A permanent demand shock that causes equilibrium output to rise above potential output will

• A)allow a stable expansion of real income over time.
• B)always reverse itself.
• C)be negated in the long run,through the economy's adjustment process.
• D)result in a price level lower than that preceding the demand shock.
• E)set off an endless cycle of price rises and increases in unemployment.

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Definitions:

External Abdominal Oblique

A muscle in the abdomen that forms part of the abdominal wall, helping in the rotation and lateral flexion of the torso and assisting in forced respiration.

Transversus Abdominis

A major muscle of the abdominal wall that helps to compress abdominal contents, contributing to core stability and posture.

Rectus Abdominis

A long muscle of the abdomen that assists in respiratory movements and stabilizes the core.

Internal Abdominal Oblique

A muscle located within the abdominal wall, acting to support the abdominal contents and aiding in movements such as twisting.