Using the Aggregate Demand-Aggregate Supply Model, Predict What Happens in the Short

question 3

Multiple Choice

Using the aggregate demand-aggregate supply model, predict what happens in the short run when the consumer confidence index falls as consumers become pessimistic about their economic prospects.

• A) The aggregate supply curve shifts right; the aggregate demand curve is not affected; price level decreases; real GDP increases.
• B) The aggregate supply curve shifts left; the aggregate demand curve is not affected; price level increases; real GDP decreases.
• C) The aggregate demand curve shifts right; the aggregate supply curve is not affected; price level and real GDP increase.
• D) The aggregate demand curve shifts left; the aggregate supply curve is not affected; price level and real GDP decrease.

---

Definitions:

Small Intestine

A part of the gastrointestinal tract where most of the digestion and absorption of nutrients takes place.

Bile

A secretion of the liver; a greenish-yellow fluid with a bitter taste.

Crohn's Disease

A chronic inflammatory bowel disease characterized by inflammation of the digestive tract, leading to abdominal pain, severe diarrhea, fatigue, weight loss, and malnutrition.

Terminal Ileum

The final and longest segment of the small intestine, which plays a crucial role in the absorption of vitamin B12 and the reabsorption of bile acids.