If the Aggregate Demand Curve Shifts Rightward Following a Decrease

question 132

Multiple Choice

If the aggregate demand curve shifts rightward following a decrease in the federal funds rate, what can be concluded if the short-run aggregate supply curve is rather steep?

• A) There will be a significant increase in real GDP with little impact on the price level.
• B) There will be a significant increase in both real GDP and the price level.
• C) There will be little increase in real GDP but a significant increase in the price level.
• D) There is significant unemployment and slack in the economy.

---

Definitions:

Government Interference

The involvement or intervention of government in personal, business, or other affairs where it might not be wanted or considered beneficial.

Semiskilled Industrial Workers

Workers possessing a limited set of specific skills or minimal training, often employed in industrial settings.

Working Conditions

The environment, including physical and psychological aspects, in which employees operate.

Gilded Age

A period in late 19th-century America characterized by rapid economic growth, technological innovation, and ostentatious wealth, but also marked by social inequality and political corruption.