In the Basic AD/AS Model, the Effect of an Aggregate

question 46

Multiple Choice

In the basic AD/AS model, the effect of an aggregate demand shock is divided between a change in output and a change in the price level. How the effect is divided depends on the

• A)position of the AE curve.
• B)size of the simple multiplier.
• C)slope of the AS curve.
• D)slope of the AD curve.
• E)amount of inflation in the economy.

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Definitions:

Subliminal Perception

involves detecting information below the threshold of conscious awareness, influencing thoughts, feelings, or actions without conscious realization.

Effect on Behavior

The impact that various factors, such as environment, psychology, and genetics, have on how individuals act or respond to situations.

Cocktail Party Phenomenon

The ability of individuals to focus their attention on a single conversation in a noisy environment, filtering out other conversations.

Phi Phenomenon

An optical illusion of perceived continuous motion between separate objects viewed rapidly in succession, such as in motion pictures.