An Increase in Inflation Expectations Would Involve a Short-Run Shift

question 55

Multiple Choice

An increase in inflation expectations would involve a short-run shift in ____ and a long-run shift in

• A) AD, AD.
• B) AD, AS.
• C) AS, AD.
• D) AS, AS.

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Definitions:

International Marketing Agreement

An arrangement between parties from different countries to promote and distribute a product or service globally.

Cournot Duopolists

Firms in a duopoly (a market with only two producers) that set their output levels independently to maximize profits, anticipating the other's response.

Inverse Demand

A representation of demand that shows how the quantity demanded of a good or service varies inversely with price.

Total Cost

The sum of fixed and variable costs incurred by a business in producing a particular level of output.