Consider the Basic AD/AS Model

question 16

Multiple Choice

Consider the basic AD/AS model. A rise in an input price like unit labour costs would be expected to create a new macroeconomic equilibrium, which in comparison to the original equilibrium, has a price level that is

• A)higher and a real GDP that is lower.
• B)lower and a real GDP that is lower.
• C)lower and a real GDP that is higher.
• D)higher and a real GDP that is the same.
• E)higher and a real GDP that is higher.

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Definitions:

Opiates

Natural or synthetic substances that are used for their pain-relieving properties, but can also lead to addiction and abuse.

Heroin

A highly addictive opioid drug derived from morphine, often used illicitly for its euphoric effects.

Problems Associated

Issues or difficulties related to a particular subject, situation, or condition that may require attention or resolution.

Night Terrors

A sleep disorder causing feelings of panic or dread, typically occurring during non-REM sleep stages and resulting in loud screams or movements.