In a Short-Run Macroeconomic Equilibrium, Potential GDP Exceeds Real GDP

question 375

Multiple Choice

In a short-run macroeconomic equilibrium, potential GDP exceeds real GDP. If aggregate demand does not change, then the

• A) short-run aggregate supply curve will shift rightward as the money wage rate falls.
• B) short-run aggregate supply curve will shift leftward as the money wage rate rises.
• C) long-run aggregate supply curve will shift leftward as the money wage rate rises.
• D) long-run aggregate supply curve will shift leftward as the money wage rate falls.

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Definitions:

Inattentional Blindness

The phenomenon where an individual fails to notice a fully visible, but unexpected object because their attention was engaged on another task, event, or object.

Absolute Threshold

The minimum intensity of a stimulus that can be detected by a person's senses at least 50% of the time.

Difference Threshold

The smallest amount by which a stimulus can be changed and the difference be detected half the time, also known as the just noticeable difference.

Weber's Law

A principle stating that the smallest noticeable difference in stimulus intensity is proportional to the intensity of the initial stimulus.