Suppose You Observe an Increase in Both GDP and Prices

question 32

Multiple Choice

Suppose you observe an increase in both GDP and prices. If you hold to the long-run perspective of no trade-offs between inflation and unemployment, you can explain your observation

• A) entirely in terms of a downward shift in aggregate demand.
• B) entirely in terms of an upward shift in aggregate demand.
• C) entirely in terms of a reduction in potential GDP.
• D) entirely in terms of an increase in potential GDP.
• E) only in terms of changes in both aggregate demand and potential GDP.

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Definitions:

Sex-Stereotypical Differences

Sex-stereotypical differences refer to the commonly held beliefs or perceptions about the differing characteristics, abilities, and behaviors of males and females based on societal stereotypes.

Highly Context Dependent

This term refers to phenomena or behaviors that vary significantly according to the specific circumstances or context in which they occur, implying that outcomes are not fixed but change with the situation.

Minimal

Pertaining to the least possible amount, degree, or size; often used to describe interventions or changes that are very small but still significant.

Speech Accommodation Theory

Modification of speech style to the context (e.g., listener, situation) of a face-to-face interindividual conversation.