Within the AD/AS Model, How Does an Economy Adjust to an Output

question 177

Multiple Choice

Within the AD/AS model, how does an economy adjust to an output beyond its long-run capacity as a result of an unanticipated increase in aggregate demand?

• A) Wage rates and resource prices will fall, causing a decrease in aggregate demand and the restoration of equilibrium at a higher price level.
• B) Long-run aggregate supply will increase, leading to a new equilibrium at a lower price level.
• C) Resource prices and real interest rates will rise causing output to fall back to its long-run sustainable rate.
• D) Lower real interest rates will stimulate demand and restore equilibrium at the initial price level.

Recognize the importance of environmental factors and community infrastructure in disease prevention.

Understand the historical development of public health initiatives and their impact on community health.

Analyze the role of government and non-governmental organizations in the advancement of public health.

Identify key figures and their contributions to public health and nursing.

---

Definitions:

Overdue

Refers to something being past its expected or scheduled time, often used in the context of payments or tasks.

Primarily Liable

Refers to the party that bears the first or main responsibility for fulfilling an obligation or debt.

Secondarily Liable

Liable for paying the amount designated on an instrument if the primarily liable party defaults.

Signature Liability

Liability attributed because of a party’s signature on an instrument.