If Prices of Goods and Services Were Inflexible, Then

question 6

Multiple Choice

If prices of goods and services were inflexible, then

• A) a negative demand shock would lead to increased real GDP in the short run.
• B) a positive demand shock would lead to increased real GDP in the short run.
• C) a negative demand shock would have no short-run effect on real GDP.
• D) there would be no short-run demand shocks.

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Definitions:

Characteristic Adaptation

Patterns of behavior, thought, and feeling that are consistent over time and situations, reflecting how individuals adjust to their environment and pursue goals.

Temperament

Innate traits that influence how we respond to the environment, typically apparent in early childhood and consistent across various situations.

Working Self-concept

A dynamic representation of oneself that is active and accessible at a given time, influenced by the immediate situation and social interactions.

Sociability

The tendency to seek out and enjoy the company of others, often considered a personality trait.