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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