Aggregate Demand (AD)shocks Have a Smaller Effect on Real GDP

question 34

Multiple Choice

Aggregate demand (AD) shocks have a smaller effect on real GDP and a larger effect on the price level,

• A)on the upward- sloping portion of the AS curve.
• B)on the downward- sloping portion of the AS curve.
• C)the steeper the AS curve.
• D)if the AD curve is flatter.
• E)the flatter the AS curve.

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Definitions:

Risk-free Return

The theoretical return on an investment with no risk of financial loss, typically less than the return on riskier investments.

Defined Contribution Plan

A retirement plan where an employee, employer, or both make contributions on a regular basis, with future benefits fluctuating based on investment earnings.

Risk-free Return

The return on an investment with no risk of financial loss, typically associated with government bonds or other highly trustworthy securities.