If an Aggregate Demand Curve Is Drawn with Real GDP

question 78

Multiple Choice

If an aggregate demand curve is drawn with real GDP (Y) along the horizontal axis and the price level (P) along the vertical axis, using the quantity theory of money as a theory of aggregate demand, this curve slopes ______ to the right and gets ______ as it moves farther to the right.

• A) downward; steeper
• B) downward; flatter
• C) upward; steeper
• D) upward; flatter

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Definitions:

Bureaucratic Approach

A method of organization emphasizing a structured hierarchy, strict rules, and a clear division of responsibilities to achieve efficiency.

Scientific Approach

A methodical process used for investigating phenomena, acquiring new knowledge, or correcting and integrating previous knowledge, based on empirical or measurable evidence.

Theory X

A management theory assuming employees are inherently lazy and will avoid work if they can, necessitating control and coercion by managers.

Theory Y

A management concept suggesting that employees are inherently motivated to work and will show high levels of creativity and responsibility if given the chance.