If the Aggregate Supply Curve Is Flat

question 195

Multiple Choice

If the aggregate supply curve is flat,

• A)contractionary fiscal or monetary policy will reduce inflation with little effect on real GDP.
• B)contractionary fiscal or monetary policy will cause significantly less inflation.
• C)expansionary fiscal or monetary policy will add significantly to real GDP will little effect on inflation.
• D)expansionary fiscal or monetary policy will add little to real GDP but will increase inflation significantly.

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Definitions:

Units of Output

measure the quantity of goods or services produced by a firm or industry.

Production Function

An equation that describes the relationship between inputs used in production and the quantity of output that is produced.

Minimize Cost

The process of reducing expenses to the lowest possible level while maintaining the quality and efficiency of business operations.

Earthquake Detectors

Instruments or devices designed to sense and record the movement of the Earth, often used to predict seismic events.