If the Aggregate Supply Curve Is Flat

question 195

Multiple Choice

If the aggregate supply curve is flat,

• A)contractionary fiscal or monetary policy will reduce inflation with little effect on real GDP.
• B)contractionary fiscal or monetary policy will cause significantly less inflation.
• C)expansionary fiscal or monetary policy will add significantly to real GDP will little effect on inflation.
• D)expansionary fiscal or monetary policy will add little to real GDP but will increase inflation significantly.

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Definitions:

Statistically Significant

A mathematical measure that indicates that the likelihood of a certain observation or result occurring by chance alone is low.

Sampling Variation

The variability in statistics (like mean or proportion) from sample to sample due to random selection.

True One

Often refers to something or someone regarded as genuinely authentic or real.

Statistically Significant

A mathematical indication that a result is not likely to have occurred by chance alone, suggesting a real effect or relationship exists in the data.