A Constant Inflation in the AD/AS Macro Model Is Only

question 31

Multiple Choice

A constant inflation in the AD/AS macro model is only possible when

• A)AD shifts upwards at a uniform rate and AS shifts upwards at a higher uniform rate.
• B)AS shifts upward at a uniform rate and AD shifts downwards at a uniform rate.
• C)AD shifts upwards at a uniform rate and AS shifts upwards at the same uniform rate.
• D)AS shifts downward at a uniform rate and AD shifts upwards at a uniform rate.
• E)none of the above - constant inflation is not possible.

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Definitions:

Total Fertility Rate

The average number of children a woman would have over her lifetime, given current birth rates.

Population Constant

A hypothetical situation where the population size remains unchanged over a period of time.

Living Standard

The level of wealth, comfort, material goods, and necessities available to a person, community, or country.

Total Fertility Rate

The average number of children that would be born to a woman over her lifetime based on current age-specific fertility rates.