Suppose the Following: (1)the Wage Rate Rises,(2)the Interest Rate Rises,(3)any

question 160

Multiple Choice

Suppose the following: (1) the wage rate rises,(2) the interest rate rises,(3) any change in AD is greater than any change in SRAS.Based on this information,in the short run Real GDP will __________ and the price level will __________.

• A) rise; rise
• B) fall; rise
• C) fall; fall
• D) rise; fall

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Definitions:

Cash Flow

The whole amount of funds that are being transferred into and out of a company, affecting its immediate financial viability.

Assets

Resources owned by a company from which future economic benefits are expected.

Earnings Per Share

A company's profit divided by its number of outstanding shares, indicating the profitability of the company on a per-share basis.