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:

Discrimination Coefficient

A statistical measure in economics or social science indicating the degree to which a variable, such as price or income, discriminates or differentiates between individuals or groups.

Wage Differential

Wage differential refers to the variation in wages between individuals, occupations, locations, or sectors due to factors like skill level, demand, or cost of living.

Nonpreferred-Race Workers

Employees who are perceived or categorized as belonging to a racial or ethnic group that is less favored or discriminated against within a societal or organizational context.