When the AD and SAS Curves Intersect at a Level

question 406

Multiple Choice

When the AD and SAS curves intersect at a level of real GDP which exceeds potential GDP and there is no government policy undertaken, which of the following will occur?

• A) The AD curve shifts rightward because the Fed decreases the money supply.
• B) The SAS curve shifts leftward because the money wage rate rises.
• C) The SAS curve shifts leftward because the money wage rate falls.
• D) The AD curve shifts leftward because the money wage rate rises.

---

Definitions:

Neuron

A cell within the nervous system that transmits information to other nerve cells, muscle, or gland cells.

Cell Body

The part of a neuron that contains the nucleus and most of the cytoplasm and where the metabolic work of the cell is done.

Axon

A long, thin part of a neuron that transmits impulses to other neurons through small branching structures called axon terminals.

Neuron

A neuron, which is the fundamental unit of the nervous system, plays a key role in conveying information across the body.