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.

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Definitions:

Nasal Cavity

A large air-filled space above and behind the nose in the middle of the face, part of the respiratory system, which filters, warms, and moistens air breathed in through the nose.

Larynx

An organ located in the neck of mammals that is involved in breathing, sound production, and protecting the trachea against food aspiration.

Voice Box

Also known as the larynx, it is the organ in the throat involved in breathing, sound production, and protecting the trachea against food aspiration.

Bronchioles

Small airways in the lungs through which air passes before reaching the alveoli, involved in the process of gas exchange.