Suppose Firms Are Currently Producing Output at a Level Beyond

question 69

Multiple Choice

Suppose firms are currently producing output at a level beyond their normal capacity.In this situation,the AS curve will be relatively ________ and a positive AD shock will result in ________.

• A)steep; an increase in the price level with a small increase in real GDP
• B)flat; an equal increase in the price level and in real GDP
• C)flat; a very small increase in prices but a large increase in real GDP
• D)flat; a very small decrease in the price level and a decrease in real GDP
• E)steep; a decrease in the price level and a very small decrease in real GDP

---

Definitions:

Preoperational Stage

The second stage in Piaget's theory of cognitive development, occurring roughly between the ages of 2 and 7, characterized by the development of language and symbolic thinking but limited in logical reasoning.

Cognitive Development

The process by which individuals acquire and understand knowledge, including thinking, problem-solving, and decision-making, through various stages of growth.

Jean Piaget

A Swiss psychologist known for his pioneering work in child development, particularly his theory of cognitive development in children.

Strange Situation

A procedure developed by Mary Ainsworth in the 1970s to observe attachment relationships between a caregiver and child.